Acquired Taste

Determined to create a future-ready portfolio of products and services, ITC has pressed the pedal on acquisitions

- ISHITA AYAN DUTT

There remains a debate on who said this: "When the facts change, I change my mind. What do you do, Sir?" Was it the British economist John Maynard Keynes or the American economist Paul Samuelson? Irrespective of who said it, this sentiment appears to have found resonance in ITC's boardroom in recent years.

In its evolution from a single-product company to a conglomerate, ITC has largely focused on building businesses and brands from scratch. Acquisitions, for much of its century-old history, have been few and far between. But with India's growth story playing out, the narrative is beginning to shift.

A big buy, and why

On March 31, ITC snapped up Century Pulp & Paper (CPP) from Aditya Birla Real Estate for ₹3,500 crore after a contested battle. The acquisition is ITC's biggest to date and comes at a time when the paper sector has been in a cyclical downturn for two years.

Supratim Dutta, executive director and chief financial officer, ITC, explained that as a long-term player, the company remains optimistic about the growth prospects of the Indian paperboards and paper industry, notwithstanding near-term challenges.

The numbers suggest strong potential.

Demand for paper and paperboards in India has been growing at 6 to 7 per cent, making it one of the fastest expanding markets globally. Yet, per capita consumption remains low at 16 kg compared to the global average of 57 kg, indicating significant headroom for growth.

Rising demand for sustainable packaging solutions across industries such as fast-moving consumer goods (FMCG), food service, pharmaceuticals, e-commerce, education, and stationery bodes well for future consumption. The only dampener is the pressure from low-priced Chinese and Indonesian supplies in global markets, including India.