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Chairman Speaks - 2003

Sangita Shah

ITC, the Rs 11,000 crore tobacco major, is considering backward integration for its apparel brand Wills. The company is planning to source cotton for its ready made garments through the e-choupal initiative.

"We have plans to source cotton through our e-choupal initiative to for our apparel business" S Sivakumar, chief executive officer, ITC international business division (IBD), told Business Standard on the sidelines of a recently held Globoil conference.

However, the company is likely to embark on cotton sourcing initiative next year. IBD is country’s second largest exporter of agri-products with exports of over Rs 500 crore. Of this, the share of e-choupal business is about Rs 300 crore which is expected to double in the current financial year to Rs 500-600 crore, Sivakumar said.

The division currently focuses on exports of soya meal, rice, aqua products, peanuts, coffee, wheat, sesame seeds, black pepper, processed and frozen fruits and vegetables.

ITC has initiated e-choupal coverage in Maharashtra and under its three year plan, 500 e-choupals were being set up in the Vidarbha region in the first phase, Sivakumar said adding that it would be expanded to Sangli followed by Nasik, next year. They will focus on soyabean, horticulture and cotton.

"It is a three year plan and we will be sourcing soyabeans to crush 70,000 tonnes of beans a year at a hired crushing plant in Nagpur," Sivakumar informed.

The soyabean oil from this plant will be sold under e-choupal brand in the rural market in line with what the company is already doing in Madhya Pradesh.

The company is planning to extend its e-choupal initiative to Uttar Pradesh and Rajasthan next year.

ITC has already set up 2500 e-choupals in 14000 villages spanning five states till date. "We are setting up six choupals everyday," Sivakumar stated.

ITC’s unique strength in this business is the extensive backward linkages it has established with the farmers. This networking with the farming community has enabled ITC to build a highly cost effective procurement system. ITC has made significant investments in web-enabling the Indian farmer. Christened ‘e-Choupal’, ITC’s web plan for the farmer centres around providing internet kiosks in villages.