For the first time in the company’s history, the cigarette division of ITC contributed less than 50% of the company’s net worth.
Ex-chairman YC Deveshwar’s decades-old vision of making ITC a more diverse company is showing great results, the company now gets 54.2 of his revenue from non-tobacco businesses.
- In the recent fiscal year report of ITC, the share of the gross sales of ITC’s tobacco division contributed 45.8%.
- The food division and agri-business generated 21.3% and 13.4% of ITC’s gross turnover last fiscal respectively.
- ITC is expecting to generate 1 lakh crore in sales from their non-cigarette FMCG businesses by 2030.
The man behind this transformation is the ex-chairman of century-old company YC Deveshwar. He is credited with diversifying ITC from a cigarettes company to one with interests in retail, packaged foods, paper and packaging.
Why ITC wants to focus more on non-tobacco sectors?
The population of India is growing at a rapid pace. The food market in India is expected to triple by 2025. This is why industrialists know that the future is in the food industry. ITC has invested heavily in its food division, for the expansion of brands like Aashirwad and Sunfeast. With their history of working closely with farmers, they can be the future leaders in this sector.
Another reason for their shift of focus is the increased taxation on tobacco products and its volatile future. The increased price of products has led to a huge loss, of around Rs. 9000 crores, and decline in 23% sales. To counter this loss, ITC has only one option, i.e. to focus on their other sectors, primarily hotels and FMCG market.