The Hindu Business Line : ITC forays into snacks segment; to invest Rs 150 cr

New Delhi March 14 ITC Ltd's food division, on Wednesday, announced its foray into the Rs 2,000-crore domestic branded, organised snacks segment through its brand Bingo, with an investment of around Rs 150 crore, which includes setting up of three new manufacturing plants across the country.

"We will be investing Rs 150 crore over the next few years for our foray into the snacks segment. We have already invested around Rs 60-70 crore," said Mr Ravi Naware, Divisional Chief Executive, Foods Division, ITC Ltd. Bingo, which will be available in 16 variants priced at Rs 5 and Rs 10, is looking to capture 25 per cent share of the organised snacks market in the next three-four years.

"ITC will be looking to leverage on the ongoing cricket World Cup. There will be television commercials to promote the new product. By next week, we will launch Bingo in most of the important markets of North and West India," said Mr Naware. He, however, declined to disclose ad spend figures. The product will be available across the country by next month, he added.

ITC has also undertaken a reclassification of its `ready-to-eat' and `to-be-cooked' foods under `Kitchens of India' and `Aashirvaad' brands respectively as it looks to rev up the business in this segment. After the reclassification, ready-to-eat foods such as `Aashirvaad rajma chawal' will be sold under the `Kitchens of India' brand.

On the manufacturing front, the company plans to add a unit in a year's time to its existing snacks facility near Haridwar. "In the next three to four years we are looking at having two more plants in order to have complete presence in all the regions of the country," Mr Naware said, adding that each new plant could cost between Rs 70 crore and Rs 100 crore.

On the company's segment-wise performance, he said that its overall foods business had grown at 60 per cent over the last year and was looking to maintain similar levels. While its Sunfeast brand biscuits grew at 60 per cent and captured around 8 per cent of the biscuits market, other foods categories like `Aashirvaad' wheat flour captured 55 per cent of the Rs 1,000-crore organised, branded market.

According to segment-wise gross revenue results of the company, for the nine-month period ending December 31, 2006, its FMCG cigarette business clocked Rs 9,539.66 crore, while its other FMCG businesses including foods, greeting cards, stationery, branded garments and agarbattis reported Rs 1,205.93 crore.

ITC's hotel arm reported gross revenue of Rs 681.32 crore, its agri business section recorded sales of around Rs 2,762.63 crore and the paper subsidiary clocked Rs 1566.71 crore.

For the same period, the company reported net revenue of Rs 8,902.96 crore and a net profit of Rs 2,049.28 crore.

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