Tobacco.org

• ITC's non-cigarette biz gather momentum  

ITC, one of the largest fast-moving consumer goods companies in India, is a market leader in the domestic cigarette industry. It is using the cash flows from the tobacco business to expand aggressively into non-tobacco businesses such as agri-commodity, packaged food, ready-to-eat, paper & paper board, hotels, personal care and garments. Many of these diversifications have now reached a critical mass and are on the verge of yielding returns. . . .

In FY07, its non-cigarette business grew 32% against the 14% growth of its tobacco business. Most importantly, profit before taxes from the non-tobacco business was up 34% against the 17% growth of its tobacco business. This was achieved despite continued losses reported by the non-tobacco FMCG business. In the June quarter, revenues from the non-tobacco business grew 25% while PBIT grew 7%, mainly on account of a decline in the profitability of paper & paper board business.

ITC is using its strength in the rural sourcing network and brand-building to acquire industry leadership in branded staples, ready-to-eat, hospitality and life style apparel segments.

Jump to full article »