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Now, ITC to enter beverages, dairy products biz
Business Standard - 31 Jul 2014

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.

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