Companies

ITC’s direct forex earnings jump 47 per cent at ₹9,779 crore in FY22

Shobha Roy | | Updated on: Jun 22, 2022

Exports of agri-commodities and FMCG products drive growth

Diversified conglomerate ITC Ltd clocked 47 per cent jump in direct foreign exchange earnings at ₹9,779 crore in FY22 compared with ₹4,600 crore in FY21, driven mainly by exports of agri-commodities and FMCG products, including foods and stationery products.

Exports contributed to nearly 16 per cent of the company’s total turnover in FY22, up 11 per cent from ₹59,745 crore in FY21.

The PLI scheme is expected to provide further fillip to exports of ITC’s products across biscuits & cakes, snacks, dairy and ready-to-eat categories. ITC continues to explore opportunities in proximal markets as a potential vector of growth going forward, the company said in its annual report.

Foreign exchange earnings of the ITC Group over the last 10 years totalled $8.2 billion, of which agri exports constituted 59 per cent.

During FY22, ITC and its subsidiaries earned ₹11,472 crore in foreign exchange a 93 per cent jumpagainst ₹5,934 crore in FY21..

Agri commodities exports

ITC is among the leading players in whole spices such as chilli, turmeric, coriander and cumin. In line with its strategy of enhancing value addition, the business has, in recent years, expanded into ‘food safe’ markets such as the US, EU and Japan, leveraging its key strengths such as identity-preserved sourcing expertise, strong backward integration, superior processes, custody of supply chain and customer focused strategies.

“During the year, the business consolidated its position as a preferred supplier for discerning customers in the food safe segment, private labels, steam sterilised and organic products. Strong growth in exports was driven by new customers and richer product mix,” the report said.

Backward integration linkages

The business also leveraged its strong backward integration linkages to enhance presence in the organic spices segment, with the entire value chain being certified by globally renowned agencies, providing assurance on product authenticity and compliance with stringent norms in the EU, US and Indian markets.

While the domestic coffee trade remained muted last year in anticipation of higher realisations on account of lower crop size in Brazil coupled with container shortages and elevated ocean freight rates, ITC recorded robust growth in exports driven by European and West Asian markets. This was enabled through strategic presence in key coffee producing regions in India, deep knowledge of estate and region-specific characteristics and focus on premium grades of Arabica, certified coffees, specialty and monsooned coffee, it said.

Apart from servicing the needs of leading coffee houses in the value-added space, the business continues to source high quality coffee grades customised to the needs of ITC’s gourmet coffee brand, ‘Sunbean’.

ITC is also one of the leading exporters of value-added frozen marine products from the country with expertise in processing individually quick-frozen (IQF), raw and cooked products, which adhere to the highest standards of safety and hygiene prevalent in developed markets such as the US, EU and Japan. During the year, the business touched record levels of sales driven by expansion into new markets in North America and West Asia.

FMCG segment

During FY22, ITC exported its brands to nearly 60 countries, despite the challenging circumstances due to steep hikes in global shipping rates and container availability issues following global supply chain disruptions.

Led by the popular Aashirvaad atta, several of its packaged food brands have witnessed growing demand among citizens in countries including the US, Canada, UK, Germany, Netherlands, Italy, Sweden, the six GCC member countries, South Korea, Japan and most countries in the Far East.

“Going forward, the businesses propose to rapidly scale up exports across categories by leveraging the brand equity of core brands such as Aashirvaad, Sunfeast and Kitchens of India and investment-led incentives under the PLI scheme,” it said.

ITC has been included under the PLI scheme towards sales-based incentives in the ready to eat, fruits and vegetables and marine categories, as well as for incentives towards expenditure incurred for branding and marketing in export markets.

The education and stationery products business (which has brands – Classmate and Paperkraft) continues to ramp up capacity utilisation of its dedicated notebook manufacturing facility at Vijayawada. The facility enables the business to develop highly differentiated notebook formats, drive cost reduction and address opportunities in overseas markets.

During the year, the business expanded its exports footprint to newer markets and successfully onboarded large global retailers leveraging capabilities at the aforestated facility.

Published on June 22, 2022
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