Calcutta, July 25: ITC chairman Y. C.
Deveshwar today unveiled his vision of positioning the tobacco major as the "Wal-Mart
of India" — a retailing powerhouse "with the lowest-cost fulfilment
capability".
Over the last few years, ITC has been
focusing on its fast moving consumer goods business, and has introduced a gamut of
products ranging from incensed sticks to readymade garments.
ITC is also expanding its e-choupal network
at a "break-neck speed" and has plans of using it as "a distribution
superhighway" for consumer goods in rural India. ITC would even distribute goods
produced by others through this click-and-mortar network.
The e-choupal network now straddles 12,000
villages in Madhya Pradesh, Karnataka, Andhra Pradesh and Uttar Pradesh. With 2,150
installations — each costing around Rs 3 lakh — the network connects 13 lakh
farmers in the country.
The company is test-marketing various
products through this network. Deveshwar said: "We could even sell motorcycles and
bicycles through e-choupals." ITC is giving final touches to its plans of
distributing insurance products through the channel.
Alongside its efforts to establish itself
as a leading player in the consumer goods segment in India, ITC is eyeing overseas markets
as well for its apparel business.
Deveshwar said the company had bought out
the ‘Wills’ brand for apparels in the United States and Japan, and was in the
process of registering it in many other countries in the developed world.
Cigarettes, however, still contribute three
quarters of ITC’s revenues, but the company is trying to reduce its reliance on the
segment due to the pressure on the industry from lawmakers.
Speaking at the company’s annual
general meeting today, Deveshwar said if regulations forced ITC to exit the tobacco
business, it would, but it would be through an "orderly withdrawal without affecting
the livelihood of the people connected with the industry".
Being the head of a diversified company,
Deveshwar looks at every business dispassionately. He said: "We would not hesitate
exiting from any business if we do not gain a leadership position within a reasonable
length of time.
"We have exited financial services and
AgroTech in the past, but at the same time have also turned around the paper and
paperboard business despite having sub-optimal financial results for many years.
"We are committed to every business,
but if a segment does not perform, we’ll first change the leader, then seek a
strategic partner, and if nothing worked, exit it altogether. But in every business we
must be prepared to see through the first few years when we look only at the
topline."
While seeking to reposition itself as a
consumer goods company, ITC wants to invest in water resource management in rural India in
partnership with other companies or governments.
Deveshwar said, rough estimates indicate
that creating artificial water-bodies in 1 lakh villages would entail an investment of Rs
6,000 crore. "We cannot do it on our own, and are looking at partnerships.
"I have spoken to M. S. Banga (the
chairman of Hindustan Lever Ltd) during my recent visit to Mumbai. His response was
positive. I have given him material on what we are trying to do on villages. He has
promised to get back to me soon."
