ITC to invest Rs 20,000 crore in new manufacturing units in medium term: Chairman Sanjiv Puri

Diversified conglomerate ITC Ltd is said to invest Rs 20,000 crore in the medium term to expand its manufacturing footprint across sectors, Chairman Sanjiv Puri said on Friday.

As part of its growth strategy, the company has already set up eight new manufacturing facilities across FMCG, Sustainable Packaging and export-oriented Value-Added Agricultural Products in recent years, he added.

Puri said the company will prioritise its 'Bharat First' strategy-focusing on deepening its domestic presence, before making a significant overseas impact. He added that new brand launches are aimed at driving value accretion.


"Global turbulence has exposed the fragility of traditional supply chains," he said while addressing the annual general meeting.

Future readiness is not merely about adapting to change, it is about anticipating, innovating and proactively shaping the future, Puri said.

65% of the company's revenue is from non-cigarette business.

ITC signed an agreement for acquisition of Century Pulp and Paper to scale up its paperboards business.

The proposed acquisition will substantially enhance capacity in a more cost-efficient fashion relative to a 1.4x higher investment and four-year gestation period required for a greenfield project of similar scale, the chairman added.

"India is the fastest-growing market in the world for paper and paperboards with demand growing at 6-7%, requiring industry to create an additional capacity of about 1 million MT per year for the next decade," Puri stated.

The Paperboards, Paper & Packaging Segment of the company witnessed a challenging operating environment, with low-priced Chinese and Indonesian supplies in global markets including India, soft domestic demand conditions, leading to subdued realisations.ITC's portfolio of over 25 world-class Indian brands represents an annual consumer spend of over 34,000 crores and reach over 260 million households in India, the company said in a report.

Speaking on India's economy, ITC's chairman said, "India’s consumer market is at the cusp of a profound transformation with per capita incomes expected to exceed $4,000 by 2030. Gen Z, poised to become a predominant part of the workforce, is expected to account for every 2nd rupee spent by 2035."

The company continues to explore opportunities to rapidly scale-up the newer FMCG businesses and evaluate emerging opportunities in this space, ITC's report stated.

To navigate current market challenges, ITC has implemented internal efficiency measures and adopted calibrated pricing strategies. It has also enhanced its product mix to drive better realisations, with the benefits of these actions expected to become visible in the coming quarters, he said.

While current results are impacted by the gestation costs of newer categories and investments in Integrated Consumer Manufacturing and Logistics (ICML) facilities, Puri reaffirmed ITC's commitment to its profitability roadmap.

"We remain committed to the guidance of 80 to 100 basis points increase in margins year-on-year. While this will not be linear, it is a trajectory we expect will sustain," he said.

Highlighting digital transformation, he said new-age channels, including ITC's own B2B app, now contribute about 31 per cent of FMCG sales. "We are building portfolios for FMCG for today and tomorrow," he added.

ITC is also setting up an integrated consumer goods manufacturing plant in Sandilla, Uttar Pradesh.

Shares of ITC Ltd. were trading at Rs. 408.35 per unit after declining 0.40% by Rs 1.65 on BSE at 12:16 PM on Friday.