Kolkata, July 27 (IANS) Cigarette-to-FMCG major ITC Ltd is pursuing a long-term strategy to build a cost-effective cold chain for preventing agricultural wastage, a company official said on Friday.
"Recognising the crucial need to unlock the lost value trapped in agri-wastage, your company is actively pursuing a long-term strategy to build a cost effective cold chain that will contribute to raising rural incomes and lend a new growth driver to your company's agri-business," its Chairman Y.C. Deveshwar told shareholders at the company's 107th Annual General meeting.
Noting agri-wastages, estimated at Rs 92,000 crore, deprive farmers of a potentially large source of income, he said: "Company's ongoing investment in setting up the integrated consumer goods manufacturing and logistics facilities (ICML) across length and breadth of the country provide a unique opportunity to co-locate a distributed network of cold chain infrastructure at a shared marginal cost."
The ICMLs comprising food processing plants are being established at strategic locations close to markets, he said, adding that the potential benefits of distributed low-cost cold chain infrastructure to the rural economy are "so attractive" as to encourage the company to take this initiative forward.
"Your company will be establishing the feasibility of this approach through a pilot in the not too distant future. The scaling up will take place together with the establishment of additional mega food processing plants, taking the total number to 20 such facilities over the next 5-10 years," Deveshwar said.
He said the company's recent foray into the perishables segment was a step in this direction and several products are being progressively introduced in the market in fresh, dehydrated, puree and frozen formats.
Deveshwar said the company would continue to strengthen its existing FMCG portfolio while entering newer categories and segments.
Responding to a query, he said, 30 new products were launched last year.
Later in the day, company's Managing Director Sanjiv Puri, in a press conference, also said the company entered into four new categories last year.
This year, the company will likely to launch "similar number" of products and be entering into "similar number" of categories, he said.
Regarding the cold chain, Puri said: "There is a concept of developing it in an efficient fashion through our ICMLs by leveraging renewable energy. First, we will do a pilot project. However, on aggregate level, we have ongoing investment of Rs 25,000 crore, which includes investment of ICMLs and others."
According to Deveshwar, over the last 22 years, its non-cigarette businesses registered a 19-fold growth, thereby contributing nearly 59 per cent of net segment revenue of the company.
Puri also said non-tobacco revenues are at Rs 26,000 crore and operating capital employed in non- tobacco segment was at little over Rs 19,000 crore.
Regarding the hotels business, he said overall performance was improved and going forward, the company would not only grow by creating and managing its own properties but also helping others for managing their properties.
The company would shift towards asset-right strategy over the period of time, he said, adding that currently, 60 per cent of the hotels were owned and 40 per cent managed.
According to him, the proportion could go to 50:50 in the next few years and the company has a pipeline of six new properties including one at Colombo, he said.
ITC Ltd, which has been planning to enter the healthcare business, has hired some professionals to examine business opportunities, Deveshwar said. Puri, however, said the newly hired team would prepare the plan for the healthcare segment by a year time and then, it would be placed before the board.
Asked whether the diversified conglomerate is open to possibility of acquiring Horlicks and Complan brand, Puri said: "If it is at the right price, why not (acquisition of Horlicks). But I don't think the bid has opened for Horlicks....However, for (acquisition of) Complan that is a very clear no."
