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p p p ITC is one of India's foremost with a market ! " #$%&' and a ( ! #$)*% . ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC ranks among +,-%. / (' 0p "1 +,, in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among ,).'! 2 compiled by Business Week. As one of India's most valuable and respected corporations, ITC is widely perceived to be +++ " +. ITC " 3)4... at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 54634...77 +, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its 2
* * They have an abiding commitment to world-class quality. Their deep market insight; cutting-edge technology; a pervasive culture of innovation has made them create a mark in the industry. The ITC Brand has made India proud through its several products and services.
8#9 ITC was + (2(3:4%&%. under the name of , 9 ' p " ! + +,. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on (2(3:4%&3;, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. < =7'2 2 ! 2 + !( > ( " +,!((. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively Indianised, and the name of the Company was changed to *9*p* + %&6:. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened ,9p +,*
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p p# ITC's Corporate Governance initiative is based on two core principles. These are :
? Management must have the executive freedom to drive the enterprise forward without undue restraints; and ? This freedom of management should be exercised within a framework of effective accountability.
9p,8# " ITC͛s mission is to ( + 7 7< 72 2" of its portfolio of businesses in a progressively globalizing environment. As one of India͛s premier corporations employing a vast quantum of societal resources, ITC seeks to fulfill a larger role by enlarging its contribution to the society of which it is a part. The trusteeship role related to social and environmental resources, aligned to the pursuit of economic objectives, is the cornerstone of ITC͛s Environment, Health and Safety philosophy. ITC͛s EHS philosophy cognizes for the twin + ! + ! +( (* In the multi-business context of ITC, Corporate Strategies are designed to create enduring value for the nation and the shareholder, through leadership in each business and the attainment of world-class competitive capabilities across the value chain. The objective of leadership extends to all facets of business operations including Environment, Health and Safety.
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#7 1.?Sustaining ITC͛s position as one of India͛s most valuable corporations. 2.?Achieving leadership in each of the business segments within a reasonable time frame. 3.?Achieving a Return On Capital Employed (ROCE) in excess of the Company͛s cost of capital, at all times.
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p 7 7 " ITC Echoupal creatively leverages information technology to set up a meta-market in favor of India's small and poor farmers, who would otherwise continue to operate and transact in 'un-evolved' markets. As of July 2007, ITC Echoupal services, through 6400 Echoupal across 8 states, reach more than 4 million farmers in about 40,000 villages. ITC intends scaling up the initiative with 20,000 choupals and 700 saagars to reach 10 million farmers in 100,000 villages by 2010. Free access to Internet is also opening windows of rural India to the world at large. ITC eChoupal is now being regarded as a reliable delivery mechanism for resource development initiatives. Its potential is being tested through pilot projects in healthcare, educational services, water management and cattle health management with the help of several service providers including non-governmental organizations.
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? ? ? ? ?? ? ? ? ? ? ?? ? ? ? ? ? ??? ? ? ? ? %*?Though the first six decades of the Company's existence were primarily devoted to the 2 <7 + + of the p2 +!9 ' businesses, the Seventies witnessed the beginnings of a ! that would usher in momentous changes in the life of the Company.
3*?ITC's =2 2B 2( was set up in 1925 as a 2'=<+ 2 for ITC's Cigarettes business. It is today India's most sophisticated packaging house.
5*?In 1975 the Company launched its 8 '( with the acquisition of a hotel in Chennai which was rechristened ,9pA 2 (8 p7 ,* The objective of ITC's entry into the hotels business was rooted in the ! 2 (! 7
. ITC chose the hotels business for its potential to: ? 727 !! 2 C7 2, ? ( !(( and ? 2 2 + + + " . Since then ITC's Hotels business has grown to occupy a position of leadership, with over 90 owned and managed properties spread across India.
:*?In 1979, ITC entered the ' + '( by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India. Bhadrachalam
Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam Paperboards Division. In November 2002, this division merged with the Company's Tribeni Tissues Division to form the ' +B # " . ITC's paperboards' technology, productivity, quality and manufacturing processes are ' 7' 7< +* It has also made an immense contribution to the development of Sarapaka, an economically backward area in the state of Andhra Pradesh. It is directly involved in education, environmental protection and community development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to ( <7+(+ +
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)*?In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). To 7 2 +
" 2, TTD was merged with the Bhadrachalam Paperboards Division to form the ' +B# " in November 2002.
;*?Also in 1990, leveraging its agri-sourcing competency, ITC set up the 2( for export of agri-commodities. The Division is today one of Y ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers. ITC's !( , christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are now operatonal in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh.
6*? In 2000, ITC launched a line of high A( "2 2+ under the brand name 'C '. In 2002, the product range was enlarged with the introduction of ! <4( 27' = +# ' =* In the same year, ITC also launched ,C ('77,, a vernacular range of greeting cards in eight languages and ,C =!,, a range of premium stationery products. In 2003, the company rolled out ,p ,, a range of notebooks in the school stationery segment. This way it established itself as a brand for students and is performing excellently due to its A( "
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@*?ITC also entered the Lifestyle Retailing business with the A # range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include A p ! < (2002) and A p (' ! 2<(2003). ITC also initiated a foray into the popular segment with its men's wear brand, D 7 ", in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - A !" +7 A= - that has gained recognition from buyers and retailers as the 2 23 ! ! 7 7 2 +(". To mark the occasion, ITC launched a special 'Celebration Series', taking the event forward to consumers. In 2007, the Company introduced ' "'- a fashion brand in the popular segment for the young woman.
&*?In 2000, ITC spun off its information technology business into a wholly owned subsidiary, 9p ! 7 + +4 to more 22 "(( 2 2 ( s in this area. Today ITC Infotech is one of India͛s fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers =" ! ( - Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and Media & Entertainment.
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ITC's foray into the Foods business is an outstanding example of successfully ' + 2 ( <+ !'( 2 <7. It began in August 2001 with the introduction of ,7 ! +, ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and staples segments with the launch of the brands and p +" confectionery and 7+atta(wheat flour). 2003 witnessed the introduction of #( !as the Company entered the biscuits segment. ITC's entered the fast growing branded snacks category with 2 E in 2007. In just seven years, the Foods business has grown to a significant size with over 200 differentiated products under six distinctive brands, with an ' +'( 7, a rapidly 2 < 2 =7 and a solid market standing.
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ITC's foray into the marketing of 2'0 =1in 2003 marked the ! ! 7<77 2 . ITC's popular agarbattis brands include #7 and 2 + across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa.
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ITC introduced A , an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. 4 the signature range under A provides a comprehensive grooming regimen with distinct lines for men ( 8 ) and women ( ). Continuing with its tradition of bringing world class products to Indian consumers the Company launched ' A ', a premium range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively. The Company also launched the '#(' range of Soaps and Shampoos in the =2 at select markets in October 2007 and / A & / range of soaps in February and / range of shampoos in June 2008.
9p( + 1.? During 2002-03, ITC crossed significant milestones both in the 2 of FMCG products launched as well as the '+7 !+'( . Investment in people systems, trade marketing expertise and product development enabled the launch and national rollout of several FMCG products spanning Apparel, Packaged Foods, Greeting Cards and Stationery, Safety Matches and Incense Sticks (Agarbatti). The business model in each of these product categories 2 2 "'+ !7 (7 7 (. Manufacturing is outsourced largely to small and medium enterprises (SMEs). Such a model enables ITC to participate effectively in 27 2 7' " of these SMEs, thereby enhancing the competitiveness of the entire value chain. ITC is engaged in further expanding its distribution and delivery bandwidth to serve as a springboard to cater to a much wider range of FMCG products©
2.? In a country where 200 million people are engaged in farming or related activities, ITC is developing its internationally competitive agricultural business by empowering, not eliminating, the independent small farmer. Its business model centers around the + " ! < = ! += =, known as p7 ( , throughout agricultural areas in India. An e-Choupal is a high-tech version of the traditional "choupal," or "village gathering place" in Hindi, where farmers are provided with the latest weather reports, local and international produce prices, and farming best practices. Costing US$ 3,000 - 6,000 each to set up, they also serve as procurement and purchase points, allowing farmers not only to sell their produce to ITC, but also to buy agricultural inputs and consumer goods for daily household use. The premise of ITC's expanded business model '=<+ 2 4 ! !( 2 7 7+(7 ! +(! ! 47'"+( 29p,+ + ++ . The e-Choupal network, by deploying IT innovatively, reorganizes the roles of these intermediaries by leveraging their strengths in physical transmission of goods; yet disinter mediating them in the flow of information along the chain. In the process several non-value-adding activities in the traditional farm to factory leg of the value chain, such as redundant transportation, bagging, handling and labor, are eliminated. This reorganization of the role of middlemen results in lower procurement costs for ITC, despite having to pay higher prices to the farmers. Transaction costs are also minimized for the farmer by buying output at the farmers' doorstep, and through transparent pricing and weighing practices. On the marketing front, ITC is able to maintain and grow the trust of its farmers by enhancing their productivity and wealth. ITC leverages this position of trust among farmers, as well as its distribution capabilities, to market its own consumer good brands and those of partner companies offering products and services that ITC does not. Sales of consumer goods through the e-Choupals have been particularly successful because the cost-savings associated with dealing directly with the manufacturer allow Sanchalaks to offer goods at lower prices than other village-level traders or retailers can afford to do.
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p ( 2 <7CFp G The p C (aka B.C.G. analysis, BCG-matrix, Boston Box, Boston Matrix, Boston Consulting Group analysis) is a chart that had been created by Bruce Henderson for the Boston Consulting Group in 1970 to help corporations with analyzing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis.
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# Õ? Hotels Õ? Paperboards/ Packaging. Õ? Agri business. p < Õ? FMCG-Cigarettes
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V? Leadership in all segments - geographic & price V? Extensive FMCG distribution network m? Direct servicing of 1,00,000 markets & 2 million retail outlets V? World-class state-of-the-art technology and products m? Investment - Rs.10 billion in six years V? Exciting long term growth potential Growth Potential: V? Cigarettes account for only 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation m? Cigarettes (15% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from tobacco sector V? Of the 58% of adult Indian males who consume tobacco, barely 15% can afford cigarettes V? Biri : Cigarettes ratio = 10 : 1 V? Annual per capita adult cigarette consumption in India is appx. one tenth world average : 141 V? Future growth depends on relative rates of growth of per capita income and moderation in taxes
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V? Market leader in growth segment - value added coated boards V? World-class contemporary technology Õ? Elemental Chlorine Free (ECF) Pulp Mill fully operational ʹ only one of its kind in India meeting world-class environmental standards V? Internationally competitive quality and cost V? Social farm forestry in mill command area to improve access to cost effective fibre & to attain self-sufficiency Õ? Biotech research based high yielding Clones ʹ effectiveness tested in nearly 68,000 hectares V? Fully integrated operations with in-house pulping capacity at appx. 1.10 lac MT Õ? Expansion programme underway; source of sustainable competitive advantage
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V? Farm linkages in 14 states covering Soya, Wheat, Rice, Marine products, Coffee etc. V? Unique CRM programme in commodity exports V? Leveraging IT for the transformational ͚eChoupal͛ initiative m? Rural India͛s largest Internet-based intervention m? Over 38000 villages linked through around 6400 e-Choupals servicing over 3.5 million farmers V? Distinctive sourcing capability for ITC͛s Foods business
9p-8 ( V? 9pA 2 ( a leading hotel chain in India Õ? Strategy to establish presence in key business locations to complete the chain achieved in end 2004 Õ? Over 5200 rooms under 4 distinct brands p9
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V? Capacity expansion underway at Bangalore and Chennai; plans for other locations also being progressed V? Fastest growing hotel chain with highest operating efficiency (PBDIT/Net Income @ 45%) amongst the 3 leading chains V? Leverages unique service proposition and international alliance with Starwood Hotels & Resorts Õ? ͚Luxury Collection͛ / ͚Sheraton͛
#A 9 "9p* ITC is one of India's biggest and best-known private sector companies. In fact it is one of the World's most high profile consumer operations. Its businesses and brands are focused almost entirely on the Indian markets, and despite being most well-known for its tobacco brands such as Gold Flake, the business is now diversifying into new FMCG (Fast Moving Consumer Goods) brands in a number of market sectors - including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery. Examples of its successful new FMCG products include: ͻAashirvaad - India's most popular atta brand with over 50% market share. It is also present in spices and instant mixes. ͻMint-o - Mint-0 Fresh is the largest cough lozenge brand in India. ͻBingo! - a new introduction of finger snacks. ͻKitchens of India - pre-prepared foods designed by ITC's master chefs. ͻSunfeast - is ITC's biscuit brand (and the sub-brand is also used on some pasta products).
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? ? ? ? ? ? ?* ?#$$+%? ,&!??%? )? With the global downturn throwing up opportunities to take over valuable assets at attractive price, diversified conglomerate ITC Limited on Thursday said it is considering acquisitions, mainly in the hospitality sector. "We are looking for operations to buy assets, particularly in hotel area. We will buy where asset prices are feasible and we are looking at all categories ranging from three to seven star hotels," ITC Chairman Y C Deveshwar said on the sidelines of a CII summit here. He said the company has resources to expand and will take the opportunity of economic slowdown to acquire assets as asset value at present is very attractive. "In fact, we are looking this (economic slowdown)as an opportunity to grow. In every adversity there is an opportunity," Deveshwar added. Asked if the slowdown had impacted the company's expansion plans, he said, "There are no plans to cut back on investments. We will stick to our capex plan because we would not sacrifice our long-term focus. We are going to accelerate our investment." Last year, the company had said it plans to invest about Rs 15,000 crore in the next five to seven years in areas such as hotels, agri-business and FMCG. Deveshwar, however, conceded the economic slowdown has affected the company. "We are also impacted of course as we are not insulated from the economy. But we are not sacrificing our long-term goals," he said.
? ? ? ? %? ? ? ? ? ? #-?. ?#$$+%?$##&??%? )? KOLKATA: ITC Ltd͛s lifestyle retailing business division is planning to expand its retail footprint further by setting up more Wills Lifestyle, John Players and Miss Players stores across the country. It has also embarked on an active exercise to create a stronger brand and retail identity for Wills Lifestyle, which it wants to position as a more international and inspirational brand. Towards this end, ITC has piloted a new concept with FRCH Design of the US, a specialist in store and mall design. Three concept stores have already been launched, two in Mumbai and one in Delhi. It is also working with the UK͛s Elemental Design and The Friedman Group from the US in areas like product presentation, visual merchandising and retail training. ͞We want to make the Wills Lifestyle brand more upscale, international and personalise the experience for the customer,͟ Atul Chand, V-P, sales and marketing, ITC͛s lifestyle retail business division, told ET. As per Mr Chand, plans are on to increase the number of Wills Lifestyle stores from 250 to 400 by the end of 2008-09. ͞These stores will come up on the lines of the concept store, which has been designed taking the cultural context, customer profile, etc, in mind,͟ he said.
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H / ### / 9# #9 9 #p4989 pp 9# #8 A9 A ####*# pp 9 98#9 / 9 I These are the words from the mouth of the editor of business today Sanjoy Narayan. This is very true in the context of ITC. ITC has been a leader in the tobacco business, but it realize from the upcoming trends that remaining with a single business is not a noble thought, moreover the company was threatened of the anti-tobacco campaign. Therefore the company decided to venture into InfoTech with ITC InfoTech, foods via Kitchens of India, greeting cards through Expressions and lifestyle retailing through Wills Sport. The revenue generation also is very high from each of these products. .ITC was a cash rich company with a liquidity of Rs.8816 million in the cigarette business, even though the company understood the need and usefulness of diversification.ITC by spreading its wings in the lifestyle segments has opened forty-five stores in 34 cities in just under a year, selling an expensive fashion brand of relaxed-wear. This way it has gained a victory lap through its Wills Sport Brand. The company has started its retail stores not only in Indian metros but also in the small towns like Ranchi, Jabalpur, Gwalior, Belguam, Ernakulam etc. thus the company adopted strong
market campaign, and used its brand image to attract the Indian youth. The strategies adopted by the company has helped it to differentiate itself in this segment, like the company is outsourcing its designs to The American Design Intelligence Group (ADIG), a San Francisco, USbased garment and retail consultancy. Now it has its own six-member team, even as it continues a tie-up with Science & Designs, an Italian fashion design house ʹ through which it keeps a watch on hot western labels such as Banana Republic and Armani Exchange. Thus by adopting these strategies ITC will surely maintain its success and add many more new sub-brands to its corporate group-ITC. Finally any strategy that a company takes is to earn revenues. The given below table clearly shows the success of ITC in terms of Rs. Crores. ? ? ?
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