Mr Y.C. Deveshwar, Chairman, ITC Ltd, today said that issues pertaining to land and regulatory approval were impacting timely implementation of the company's Rs 23,000-crore capital expenditure plan.
ITC previously proposed a five-year investment plan, ending in 2016, in FMCG, hotels and paper and packaging businesses. The company is now expecting to complete the projects by 2017.
“We are not happy with the pace of execution. Most of the delay is beyond ITC's control. It is due to multiplicity of regulatory approvals,” he said at a press meet after the company's 100{+t}{+h} annual general meeting here on Friday.
Dairy project
In its bid to foray in the dairy segment, ITC plans a pilot project in Munger in Bihar. “To start with we could produce skimmed milk powder and ‘ghee' as that does not require cold chain infrastructure.
Earlier, at the AGM, he said, “ITC's animal husbandry programme has reached out to nearly five lakh milch animals leading to a significant increase in milk yields.”
FMCG biz
ITC's FMCG business was likely to turn profitable over the next five years, he pointed out. “I will ensure these businesses become profitable before I hang up my boots. The signs of break-even are already there,” the ITC Chairman said. The company plans to pump in Rs 8,000 crore into the sector.
ITC has reduced its losses in the personal care and branded food business from Rs 89 crore to Rs 76 crore in the first quarter of this fiscal.
Stake in Hotels
On enhancing equity stake in EIH and Hotel Leela, he said, “If opportunities are good and pricing is attractive then our treasury team will take a call on this.”
According to him, ITC has “temporary liquidity” to the tune of Rs 4,000-5,000 crore, which could be deployed in various instruments. “We will prefer investing in sectors such as hotels, FMCG and agri commodities as we operate in these areas,” he explained.
On West Bengal, he said: “We had plans to invest thousands of crores of rupees but so far we have not been able to do so. Land is a major impediment.”
ITC has closed down two of its Wimco factories at Chennai and Ambernath engaged in the safety matches business. The company would use the infrastructure to manufacture newer products.
ITC Global Holdings Pte Ltd - which was placed under judicial management in 1996 – would be wound up soon, he said.