NEW DELHI: The $10.8 billion food and tobacco to hotels giant ITC Ltd is planning to 'bounce back’ and is drawing up sector-wise plans and re-imagining the future to adapt to the new environment that will emerge once the lockdown is over.
The 110-year-old corporation also believes that it would at least take a quarter for a reasonable level of production to come on stream. ITC Chief Sanjiv Puri said in an interaction that he believed all manufacturing except in containment zones should be allowed to kick-start the economy.
The ITC Chairman-cum-Managing Director said that he had formed teams to look into revival plans, so that the firm is able to adapt to changing circumstances. "The idea is to bounce back quickly and take advantage of emerging opportunities."
Puri who took over from ITC's long-time chief 'Yogi' Deveshwar last year after the latter passed away, said he expected shifts in consumer behavior after the pandemic. "There is likely to be a shift towards health and wellness products. Strong brands will be important... consumers will look for safety, hygiene and trust in brands," he said, adding that in the future consumers would increase digital engagement with brands over time.
However, at the same time, he said that the experience of the lockdown could also mean that consumers would trust their neighborhood 'kirana' or retail stores more. Till now the trend had been ever-increasing share of e-commerce eating into retail store trade.
For instance, in the hotel sector, going ahead, Puri an alumnus of IIT Kanpur and Wharton, said consumer concerns would revolve on safety and the challenge would be to redesign services so that there were more non-contact services and social distancing is maintained.
He stressed that there would still be scope for revival and growth. "Outbound tourism for Indians stood at 23 million annually. This will go down because of the pandemic in the months ahead but there will still be a need for leisure. We have to see what we can create, redesign our offerings."
ITC expects its tobacco, hotels and packaging divisions to be hit in the first quarter. Even other businesses will not be left unscathed.
Of its 120 producing units, only about 70-80 were operational, each working at between 20-60 per cent capacity. Puri said, "We are running units were there is a visibility of demand."
He added that many units were facing supply chain and logistics challenges .
ITC over the years has diversified from a tobacco firm at a fast pace into a true-blue consumer goods company making products ranging from Ashirvaad atta to Yippee noodles to Fiama soaps. Most have been organically but at times through acquisition.
Puri did not rule out acquisitions in the post lockdown period, given opportunities that might arise.
He pointed out that 'agility' would be a key element in industrial strategy in the days ahead. "We realised during the lockdown that consumers wanted products to disinfect surfaces and packets. So in four weeks we developed Savlon Disinfectant spray," Puri said.
The ITC Chairman said that the firm's long-term goal of achieving a turnover of Rs 1 lakh crore would remain, but indicated that given the downturn in the economy it would take longer to achieve.
"The most optimistic GDP forecast (for the current year) is 2.5 per cent... but we believe that the long-term fundamentals for growth still remain strong in India.”