ITC seeks to create "Indian brands"

Warc, 28 January 2013

NEW DELHI: ITC, the conglomerate, is seeking to boost its portfolio of "Indian brands" in the fast-moving consumer goods sector as it tries to increase sales in the country.

The firm, which is part-owned by British American Tobacco and still draws sizeable revenues from cigarette sales, is attempting to tackle what is sees as a long-term deficiency among Indian firms.

"From baby food to breakfast cereals, there is a surfeit of foreign brands in the country. Our country has not been able to build strong local brands," Y C Deveshwar, ITC's chairman, told the Economic Times.

"ITC is engaged in building Indian brands across all consumer goods categories," he continued. "With our brands, value will be captured and re-invested in India."

The company generated Rs5,500 in revenues from the fast-moving consumer goods category in its last fiscal year, and has outlined the goal of boosting this figure to Rs15,000 by 2015–16.

"We are the fastest-growing FMCG company in the country. I want to make ITC the number one FMCG company in the country. This won't happen in my life but I want to set it on that course," Deveshwar said.

Its food business, which yielded around 60% of sales outside of cigarettes, currently spans categories ranging from biscuits and crisps to noodles.

"Brand-building requires a lot of investment, but we have the staying power and the resources," said Deveshwar.

ITC's leading brands at present include Sunfeast biscuits, Bingo savoury snacks and Candyman confectionery. One of its longer term targets is to enter the chocolate category, which is growing rapidly.

While ITC's FMCG business registered a modest loss of Rs24 crore in the last quarter, Deveshwar also reported that is has now reached breakeven stage, and would received further support if needed.

"The profitable parts of the business are funding the non-profitable ones. But if in the future, we decide to make more investments, we will use the cash flow from cigarettes to build brands and assets," he added.

Data sourced from Economic Times; additional content by Warc staff