Smoking Out Its FMCG Ounterparts

Is ITC’s ambition of achieving Rs 1 lakh crore turnover by 2030 in the FMCG business a realistic target?

- Monica Behura

MANY YEARS AGO, Y.C. Deveshwar embarked on a mission to transform ITC to an FMCG major. It was a plan to introduce everything FMCG from biscuits to snacks and soaps and more. It worked wonders as ITC achieved Rs 10,000 crore turnover in the business, leaving some wellentrenched big FMCG brands way behind. Two years ago, Deveshwar embarked on another plan — this time, to boost FMCG revenues to over Rs 1 lakh crore by 2030. In FY17, ITC’s FMCG revenues crossed Rs 14,000 crore. But the new target still calls for expanding the FMCG business seven times in the next 13 years.

After he first announced the new vision, Deveshwar delegated the next part of the growth plan to his successors. The man behind ITC’s insatiable growth stepped aside early this year after 25 years at the helm; and his next in command Sanjiv Puri has taken up the mantle of running the business and gunning for the growth targets.

The scale and size of the target is huge. FMCG revenues have to increase by 14 per cent every year for the next 13 years if this division has to hit the coveted Rs 1 lakh crore mark. Will the company be able to scale up to a size never seen before in the FMCG business?

Sanjiv Puri, CEO and Executive Director of the ITC Group, in an exclusive interview to BW Businessworld, said he is optimistic. “FMCG is the space where there is a lot of opportunity because the market is set to grow. Penetration is low, per capita is low so there is a lot of headroom to grow. This is the area where we have done quite well in a short span of time.”

The cumulative sales of ITC’s non-cigarette FMCG brands has crossed the $2-billion mark in the fiscal ending March 2017, at Rs 14,000 crore growing by 16 per cent over the previous year, the company disclosed in its annual report.