| Moving fast
Calcutta, March 26: ITC Ltd, the tobacco-to-hotels major, has chalked out a Rs-14,000-crore investment plan, spanning all business segments, over a period of five years.
The ITC board, which met today, approved the business plan ending 2009-10. The plan entails investments in FMCG, hotels, paperboards, paper and packaging and agri business. It is being considered to be fairly aggressive given the fact that ITC's capital expenditure stood at Rs 3,000 crore in the last five years.
ITC chairman Y. C. Deveshwar said: 'Apart from the positive growth signals in the economy, the board's decision was driven by our aspiration to contribute significantly to the national effort of investment-led job creation.'
The company said the investment plans were aimed at positioning each of the businesses in the ITC portfolio as a leader in its respective market. ITC will look at both organic growth and acquisitions in India and abroad.
Bulk of the investments would go towards the upgradation of technology in tobacco, creation of new production facilities for the foods and garments businesses, expansion of the ITC Welcomgroup chain through addition of hotels and consolidation of the company's leadership position in the paperboards business with the addition of an integrated pulp and paper facility.
ITC's e-choupal rural sourcing and distribution network and the rural hyper-market chain under the 'Choupal Sagar' store brand will be expanded. The capital outlay will mainly be sourced through internal accruals. The company has hardly borrowed to meet its capex.
ITC is virtually a debt-free company with the debt-equity ratio at 0.02:1.
At the end of last fiscal, the company had a reserve of Rs 6,000 crore. 'The cash flow situation is extremely robust. The company is sitting on a huge stockpile of cash. It does not need to raise debt to finance projects,' sources said.
The last five years have seen major diversification in the company's business.
ITC entered the lifestyle retailing business with the Wills Sport range relaxed-wear in 2000. ITC also forayed into the popular segment with its menswear brand, John Players, in 2002.
ITC started the branded and packaged foods business in August 2001 with the launch of the 'Kitchens of India' brand. A more broad-based entry had been made in June 2002 with brand launches in the confectionery, staples and snack foods segments.
In 2002, the 'Mint-' trademark was acquired and re-launched in orange and mint flavours. In the same year 'Aashirvaad' atta was also rolled out. The Aashirvaad brand now extends to ready-to-eat foods, ready-to-cook pastes and salt. In 2003 'Sunfeast' biscuits were launched.
ITC started marketing Agarbattis (incense sticks) in 2003. The last five years also witnessed acquisitions in paper board business.
In 2004, it acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO).
The ITC board did not discuss the contentious ordinance issued to recover excise dues.
The ordinance, issued to recover Rs 803 crore excise dues from ITC, had lapsed on March 24.
It was issued in January to recover the 18 year-old-excise dues from ITC after it won the case in the Supreme Court in September.
The excise department had already asked ITC to pay Rs 450 crore as the company had earlier paid Rs 350 crore.