We are at a take-off point but we are building the company for the next 100 years: Y C Deveshwar
Tobacco-to-hospitality giant ITC wants presence in new business segments such as fruit juices, tea & coffee, chocolates. During the 103rd annual general meeting here on Wednesday, ITC chairman Y C Deveshwar said, “We are on a take-off point but we are building the company for the next 100 years.”
“We want to grow in new areas…in areas of fruit juices, tea ,coffee, chocolates. And in dairy products. There will be new gestation. This is the best time to absorb the cost of gestation of new area and build the company for tomorrow, “he added while responding to shareholders during the AGM here.
ITC has communicated about its intent to enter dairy products but this is the first time there is official statement from Deveshwar on possible foray in beverages and chocolates.
Commenting on higher tax imposed on cigarettes, the ITC chairman said, “I am of view that it is tactical approach that cigarettes are being taxed heavily. Let me tell you only 12% tobacco consumption is in legitimate cigarette consumption. On rest there is very little tax increase on other areas.”
According to him the Kolkata based conglomerate was in constant dialogue with state and central government for an equitable approach on taxing cigarettes. 83% of pre -tax profits come from cigarette business for ITC. In the last budget the government imposed a steep hike of 11-72% excise hike on cigarettes.
During the first quarter of FY15, ITC has witnessed volume decline of about 3% in the cigarettes business, according analysts and the scenario is likely to continue for the next couple of quarters at least.
Deveshwar also said that royalty payments should only be permitted between unrelated parties based on purely commercial considerations with no or little government intervention. This, according to the ITC chairman, will facilitate Indian enterprises in accessing intellectual capital to compete effectively with international players in Indian global market.
“Such a policy would framework would go a long way in creating a level playing field for Indian enterprises besides ensuring that the twin deficits do not get further aggravated as India's private consumption market grows,” he added in his speech.