ITC to have 8 new food processing plants by 2019

Consumer goods conglomerate ITC will be setting up eight new integrated food processing units by 2019, with investments in excess of Rs 4,000 crore. The planned investments are a part of its long-term plan to invest Rs 25,000 crore, majority of which will be allocated towards its food business, V L Rajesh, divisional chief executive, ITC Ltd said.

The fast moving consumer goods (FMCG) major has already acquired land for the proposed plants in states like West Bengal, Assam, Karnataka, Tamil Nadu and Maharashtra. An integrated plan at Kapurthala in Punjab, which currently produces various items like Atta and fruit juice, has been set up with Rs 1,400 crore of investment.

According to Rajesh, ITC’s interests in the packaged food business is due to the fact that food processing business has huge potentials in India. Nearly 88 percent of the Rs 34,00,000 crore (US$ 510 billion) food industry remains unorganized in the country. ITC is currently working on to launch more than 20 new products by end-2016 in the categories that it is present already. “We will be venturing in to a few of the new categories as well. Our offering in the dairy whitener space will be ready by next month”, he said.

Cigarettes to luxury hotels major ITC’s chairman Y C Deveshwar set a target of Rs 1,00,000 crore from new FMCG business and to position the company as the biggest player in the FMCG space in India by 2030. It had filed 351 patents in agri and consumer goods categories, Deveshwar told investors in 2015. “We have envisaged an outlay of ?25,000 crore in 65 projects across the country that include setting up of factories”, he said.

Apart from focusing on new categories, ITC has gained significant market share during the past two years in the instant noodles market where it operates through the brand Yippee. “Our market share has doubled to 29 percent in 2016 compared to what it was in the pre-Maggi ban period”, Rajesh said. Yippee’s sale grew 30 percent in the past one year, after growing by 45 percent during 2014-15.

Apart from aggressive marketing and innovative offering, an established distribution channel and sales team helped it achieve success in the food business, he said. Currently, ITC products reaches 2 million retail outlets across the country.

B Natural, a brand that ITC acquired in 2014, with Rs 100 crore from Bangalore-based Balan Natural Foods and ventured in to the Rs 2,400 crore domestic juice market. Currently, it holds seven percent share of the juice market and aims to grab 11 percent share by end-2016. “We are expanding our juices portfolio and our latest offering is Punajb da Kinnow, targeted at the northern Indian consumers”, Rajesh said.