Aspiration to be No.1 in Each Business – ITC Chairman Mr. Sanjiv Puri

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New Delhi: In his maiden AGM address as the Chairman of ITC Ltd, Mr. Sanjiv Puri charted out a 9 pillars approach to consolidate ITC’s position as a resilient ‘Enterprise of Tomorrow’ that generates sustained value for all its stakeholders, whilst contributing to national priority goals that accelerate job creation and replenish the environment.
The excerpt from the speech is below:
Sab SaathBadhein: Championing the cause of inclusive growth
ITC’s unique business model that enables the creation of larger societal value underlines the true spirit of ‘Sab SaathBadhein’ and guides every thought, strategy and action.
ITC seeks to be an engine of growth for the Indian economy through a vibrant portfolio of future-ready businesses that are well poised to serve the emerging needs of a growing market through world-class Indian brands. These businesses also anchor competitive value chains that empower millions of farmers and trade partners, generating livelihoods for more than 6 million people in the country
ITC: Growth with Profitability & Equity
It is ITC’s aspiration to be a leader in every business segment that it operates in and be acknowledged as a trusted provider of best-in-class products and services.
1.Expanding Horizons: Powering the ITC of Tomorrow
Today, around 25% of ITC’s Segment Revenue is from newer FMCG businesses. The segment’s EBITDA at Rs.688 crores in FY19, increased 51% over last year.To accelerate growth in the FMCG businesses, 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 also strategic opportunities for acquisitions.
In the last 2 to 3 years, ITC has expanded its FMCG portfolio by foraying into new segments. This includes the exquisite ‘Fabelle’ Chocolates collection, Dairy & Dairy Beverages under the ‘AashirvaadSvasti’ and ‘SunfeastWonderz’ brands, Frozen Foods from the ‘ITC Master Chef’ collection, Skincare with the premium ‘Dermafique’ brand as well as the popular ‘Charmis’ brand, Hand Sanitizers under ‘Savlon’ and Floor Cleaners with the natural neem-based ‘Nimyle’ brand. Over 50 products were launched last year to strengthen existing categories and enter newer segments.
ITC’s Agri-Business is increasingly focusing on value-added products in the fresh, frozen, perishables and dehydrated formats, which include IQF prawns, food-safe spices, purees and dehydrated onions for both B2B and B2C segments.
ITC remains a clear leader in the Value-Added Paperboards segment. Recent launches include the Décor papers portfolio, new value-added offerings including special boards based on renewable and recyclable material.
Hotels Business has expanded over time to encompass 109 properties with more than 10,000 rooms, which enrich the nation’s tourism landscape. Going forward, an asset-right strategy is being pursued to accelerate growth and drive profitability through an optimal mix of owned and managed properties.
Leveraging the domain knowledge of ITC’s diversified footprint, ITC Infotech is expanding its portfolio of digital solutions and services and holds the promise to evolve into a sizeable business over time.
2. Creating Unique Sources of Competitive Advantage by Leveraging Enterprise Strengths
Over the years, ITC has carefully developed and nurtured a wide array of enterprise strengths encompassing deep consumer insights, extensive relationships with farmers and rural communities, superior agri-sourcing capabilities, state-of-the-art manufacturing, leading-edge R&D, packaging excellence, brand building capabilities, cuisine expertise of ITC Hotels and an extensive and efficient trade marketing & distribution infrastructure.
An interplay of such institutional capabilities is today evident in several of ITC’s FMCG products including ‘Aashirvaad’ Atta, ‘YiPPee!’ Noodles, ‘SunfeastWonderz’ Dairy Beverages, Fabelle Chocolates ‘Sunbean’ Coffee, Master Chef Frozen Snacks, ‘Classmate’ Notebooks & Stationery, ‘Fiama’ and ‘Vivel’ Bodywash, ‘Mangaldeep’ Agarbatti to name a few.
ITC’s formidable distribution network enables it to place products in more than 6 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.
3. World-Class Indian Brands: Creating Enduring Value for the Nation
ITC believes that winning home-grown brands ensures greater value capture and retention in the country, besides creating sustainable livelihoods. ITC has built a portfolio of 25 world-class Indian brands that are today either leaders in their categories or making appreciable progress. Today, ITC’s vibrant portfolio of brands represents an annual consumer spend of over Rs.18,000 crores. In terms of annual consumer spend, ‘Aashirvaad’ is today over Rs.4,500 crores; ‘Sunfeast’ over Rs.3,800 crores; ‘Bingo!’ nearly Rs.2,500 crores; ‘Classmate’ over Rs.1,400 crores; ‘YiPPee!’ over Rs.1,100 crores while ‘Vivel’, ‘Mangaldeep’ & ‘Candyman’ are over Rs.500 crores each.
4.Building Competitive and Resilient Agri Value Chains: Multiplying Farmer Incomes
ITC’s century-old linkages to the agrarian and rural economy have substantially intensified over the years with its growing presence across vibrant value chains extending from farm to fork, tree to textbook, livestock to dairy as well as bamboo to agarbatti anchored by its FMCG, Agri and Paperboards Businesses. The Integrated Fruits, Vegetables and Perishables Value Chain has enabled ITC to foray into new segments with a wide range of offerings including Frozen Food, Dehydrated Onions, Potatoes, Mango Pulp, Prawns and so on.
ITC’s newly launched initiative, ‘BaarehMahineHariyali’ programme, that is intrinsically aligned to the Prime Minister’s vision of doubling farmer incomes, is being progressively rolled out to 1 million farmers and includes interventions including agronomic practices such as zero tillage, introduction of right varieties, cropping intensity and diversification as well as shared mechanised farming equipment. This pilot programme covered over 2,00,000 farmers, out of which 35,000 have already doubled incomes while others are making encouraging progress. ITC is collaborating with NITI Aayog to progressively build capacity of 2 million farmers in 27 Aspirational Districts to help enhance rural incomes.
ITC’s large-scale Integrated Watershed Development initiative helps strengthen the availability of water resources across 16 States. This year, ITC crossed thehistoric milestone with its soil and moisture conservation programmes cumulatively covering more than 1 million acres of water-stressed areas. Apilot programme at scale on ‘water use efficiency in agriculture’ is also being promoted to enable effective demand-side management. This initiative has yielded water savings of 20% to 45% in crops like Sugarcane, Wheat, Rice and Banana.
5. Energising Innovation to Drive Competitive Growth
ITC’s globally benchmarked R&D centre, the ITC Life Sciences and Technology Centre is mandated to secure, science-led competitive advantage and develop future-ready products & processes. In a relatively short period of time, over 830 patents have been filed. ITC is also engaging with the start-up ecosystem to gain from their vibrant innovative capabilities, and where appropriate, making investments.
ITC’s innovation engine is at work 24×7 and is helping create a bouquet of distinct, superior and first time to market products for today, tomorrow and day after.Examples of first-to-market innovations include ‘Engage ON’ pocket perfume that enabled a creative disruption in the market, India’s first Ruby Chocolate from ‘Fabelle’, the ‘Savlon’ Sanitizer spray in a pen format, ‘SunfeastWonderz’ Dairy Beverages with fruit inclusions, ‘Fiama’ Bodywash with a unique fragrance encapsulation technology, and so on.
6. Harnessing the Digital Dividend
ITC has formulated a comprehensive business-wise digital strategy driving transformational change across value chains. Efficiencies in the backend are being enhanced through increased use and experimentation of digital technologies such as Industry 4.0, Artificial Intelligence, Data Analytics, Machine Learning, Augmented & Virtual Reality, Advanced Automation, Robotics and Mobility, among others. These are being deployed to enable smart manufacturing, smart utility management, enhance efficiencies in dealer management and transportation management systems, supply chain agility as well as in front-end execution in sales and marketing.
7. Building National Assets: Supporting the Make in India Vision
ITC is investing in building state-of-the-art manufacturing infrastructure across the country to rapidly scale up the FMCG businesses, build an extremely competitive supply chain and contribute to the country’s Make in India vision. The 20 Integrated Consumer Goods Manufacturing and Logistics (ICML) facilities being progressively built will provide formidable strength to the Company’s FMCG brands by enhancing cost efficiency, economies of scale, freshness and close-to-market distribution. During the year, ITC commissioned a world-class ICML at Pudukkottai in Tamil Nadu, while operations at Kapurthala, Panchla and Guwahati were ramped up further. The recent investments in the Bleached Chemi-Thermo Mechanical Pulp (BCTMP) mill at Bhadrachalamwill help in substituting imports whilst enhancing agro-forestry farming opportunities. ITC is also committed to buildingiconic hospitality assets to enrich the nation’s tourism landscape. Forthcoming hotels include the ITC Narmada in Ahmedabad, and WelcomHotels in Amritsar, Bhubaneshwar and Guntur.
8. Creating Sustainable Communities
ITC’s ‘Nation First: Sab SaathBadhein’ philosophy underlines our core belief in building a globally competitive and profitable Indian enterprise that makes an exemplary contribution to creating larger societal value.ITC’s e-Choupal initiative has empowered over 4 million farmers, the Afforestation programme has greened over 7,30,000 acres, whilst generating over 135 million person days of employment, the Animal Husbandry programme has covered over 17,75,000 milch animals, initiatives in Women Empowerment have reached over 64,000 beneficiaries, Vocational Training has covered over 67,000 youths, the Primary Education programme has benefitted over 6,90,000 children, while more than 35,000 toilets have been built.ITC’s Well-being Out of Waste programme (WOW in short) contribute to the Swachh Bharat Mission and comprehensively addresses the problem of solid waste management, of which plastic waste is a significant component. The initiative provides an end-to-end sustainable and scalable solution that has reached out to 89 lakh citizens in the country.
A recent initiative on building climate-smart villages aims to reduce the vulnerability risks faced by poor farmers. ITC’s Social Investments Programme, which today covers 235 districts in 27 States of India, are progressively being scaled up.
9. Nurturing and Acquiring World-class Talent
ITC’s model of distributed leadership has today created a diverse talent pool of professional entrepreneurs – ‘Proneurs’. ITC provides a culture akin to start-ups, where young people with passion and determination can contribute significantly to creating winning products and services.
In Conclusion
As ITC moves into the future, Team ITC’s unwavering commitment even in the face of all adversity will lend new wings to its aspiration. It will also be ITC’s untiring endeavour to lead by example as an Enterprise of Tomorrow by pursuing growth strategies that will be responsibly competitive, sustainable and inclusive.