NEW DELHI: The diversified conglomerate, ITC Ltd on Friday said it is open to acquisitions as it plans to expand its fast-moving consumer goods (FMCG) business by adding newer segments under its portfolio.
“To accelerate growth, the endeavour is not only to fortify the existing categories towards delivering industry-leading performance but also to foray into newer categories and sub-segments. This would be supported by multi-dimensional investments as well as strategic opportunities for acquisitions,” chairman Sanjiv Puri told shareholders, in his maiden address at the company’s 108th Annual General Meeting.
This comes at a time when ITC aims to generate Rs 1 lakh crore sales by 2030 betting on its newer FMCG business. To be sure, the share of cigarettes in its top line has been consistently falling, while other categories such as staples, biscuits, frozen foods, organic purees, soaps and hotels contributed more than half of ITC’s gross revenue in the year ended March. Overall, nearly 25 per cent of ITC’s revenue comes from newer FMCG businesses under the non-cigarette portfolio. The segment’s EBITDA, at Rs 688 crore in the last fiscal, rose by 51 per cent year-on-year.
“Over 50 products were launched last year to strengthen existing categories and enter new segments. A strong pipeline of products is constantly being readied for progressive launch to continue delighting our consumers and create new levers of growth for the FMCG businesses," Puri said, adding that the company is working to venture into every possible category. ITC also plans to expand its dairy business which is currently limited to some geographies such as East and South and products like milk, ghee, curd, paneer and beverages.
In the last two to three years, ITC has expanded its FMCG portfolio by foraying into new segments such as the luxury ‘Fabelle’ Chocolates collection, dairy & dairy beverages under the ‘Aashirvaad Svasti’ and ‘Sunfeast Wonderz’ brands, frozen foods from the ‘ITC Master Chef’ collection, skincare with the premium ‘Dermafique' among others. Acquisitions like the Charmis brand of face cream and Nimyle floor cleaners were also acquired to enter new segments.
Currently, the company's consumer goods reach more than six million retail outlets. "Substantive investments are being made in expanding this network and in developing alternate and emerging channels such as modern trade, on-the-go, food services, end-to-end cold chain, e-commerce and so on," Puri added. The company is also leveraging the benefits of digital technology with focused investments in areas such as customised mobility solution and data analytics to boost productivity, operational effectiveness and sharp target market interventions.