ITC lines up $2-bn investment plan, eyes acquisitions

Business conglomerate ITC Ltd on Thursday said it plans to invest around $2 billion (around Rs 14,851 crore) as part of its next strategy, under which it will explore opportunities to craft disruptive business models. Addressing a virtual press conference, ITC Chairman Sanjiv Puri said the investment would be to beef up capacity to meet demand, to remain competitive and in technology and quality upgradation and new vectors of growth that it has identified.

Besides, ITC is also looking for acquisitions as part of its expansion plans, the spend on which will be over and above its planned investment, he added.

The company has identified certain future consumer trends, and any opportunity that aligns with these areas and is value accretive, then we will go forward, Puri said.

"Now, in terms of investments for those kinds of figures, we have been sharing from time to time, I mean, for building capacity to meet market demands in existing segments for inducting state of the art technology in contemporary investments in Digitals and some of the newer areas that we have identified."

"We are looking at medium term, we are looking at about two billion. That's the kind of figure we have. And, of course, inorganic is something that cannot be sized depends on library dollars," said Puri. Though Puri did not share the exact timeline for the investments but said it is a medium term horizon and would take a few years.

While sharing detail, Puri said: "The investment would be for capacity gearing as the volume of a particular category increases and utilisation reaches a threshold then we have to add additional lines, that is the one vector and second we have to upgrade the quality from time to time, we need to replace and bring contemporary technology."

The third would be for new growth areas such as plastic substitute and super App, ITC MAARS to unlock the potential of small farmers.

"We have our investment plans. We are talking upscaling food processing," he said, adding capacity gearing would be in the FMCG business, paper business, agribusiness and even in the packaging business, where ITC is setting up a plant in Gujarat to cater to the growing demand. The company is also setting up a Nicotine derivative plant under ITC Indivision, while in Andhra Pradesh it is setting up a spice facility to cater to both domestic and export markets for IPM-certified food and spices, which will meet the stringent norms of some of the other countries, Puri added.