ITC pursuing value accretive acquisition, joint ventures to boost FMCG business

Shobha Roy | | Updated on: Jun 22, 2022

However, inflationary headwinds pose challenges in the near term

ITC is proactively pursuing value accretive acquisition, joint venture and collaboration opportunities in strategic areas to accelerate growth in FMCG business.

The segment, which is largely characterised by low household penetration levels and/or low per capita consumption, offers significant headroom for long-term growth.

ITC is well poised to address adjacent growth opportunities by leveraging over 25 powerful mother brands it has established over the years, the company said in its latest annual report for FY21-22.

The FMCG business comprising branded packaged foods, personal care products, education and stationery products, incense sticks and safety matches has grown at an “impressive pace” over the past several years.

The company’s portfolio of over 25 Indian brands, largely built through an organic growth strategy, represents an annual consumer spend of over ₹24,000 crore and reach over 200 million households in the country.

However, inflationary headwinds pose significant challenges in the near term.

“The company continues to take proactive measures to counter the impact of such headwinds across all nodes of operations and deliver competitively superior performance leveraging its institutional strengths and harnessing advantages of scale and smart buying initiatives in a consumer-centric, agile and innovative manner,” it said.

ITC is confident of rapidly scaling up its FMCG business on the back of a strong future-ready portfolio powered by superior consumer insights and product quality, cutting-edge innovation, agile and efficient supply chain and purpose-led brands.

New products

The company launched over 110 new products across target markets during the year, leveraging the innovation platforms of Life Sciences and Technology Centre (LSTC). The businesses will continue to leverage their institutional strengths through strong backward linkages with the agri business, a deep and wide multi-channel distribution network, cuisine knowledge resident in the hotels business, packaging knowhow and access to robust R&D platforms nurtured by LSTC.

 “Investments in innovation, smart and agile value chains, state-of-the-art distributed manufacturing footprint and digital technologies will continue to be pursued to strengthen market standing and seize growth opportunities going forward,” the report said.

Cutting-edge digital technologies, including Industry 4.0, advanced analytics, big data and industrial Internet of Things (IoT) will be deployed for strengthening its real time operations and execution platform. Several digitally powered interventions are underway to enhance productivity, drive efficiency and reduce costs, it said.

Published on June 22, 2022
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