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ITC to add more flavour to spices business
The Economic Times - 30 Dec 2008

At a time when liquidity crunch and global meltdown appears to have deterred almost all companies across different segments to put their future growth plans on hold, ITC is looking to spice up its spices business in a big way. The company is planning to set up modernised processing infrastructure in Rajasthan for grading, sorting and cleaning of seed spices like cumin, coriander and pepper.

The detailed investment plans are being worked out. The proposed integrated ‘cleaning-cum-sorting’ facility will enable ITC supply clean and graded seed spices procured from the mandis of Rajasthan, Gujarat and Madhya Pradesh to a growing and discerning domestic and international customers. The mechanised processing is intended to create value for customers in terms of supply of consistent hygienic products, adhering to specific quality specifications, an ITC spokesperson told ET. The new facility will be in addition to ITC’s spices cleaning, grinding, packing and steam sterilisation facility at Guntur.

Usage of seed spices like coriander and cumin, the spokesperson added, is steadily increasing because of the increased usage of ‘blended spices’ and ‘seasonings’ in ready-to-eat or cooked foods. The new facility will also give thrust to ITC’s planned foray into the growing value-added exports market for spices. It will also enable ITC to position itself as an integrated spices player.

Incidentally, the country’s fragmented Rs 20,000-crore spices market is characterised by a large number of unorganised players having semi-manual, small facilities across the country and adhering to varying quality standards. Apart from this, ITC is also planning investments to mechanise its various operations in its supply chain, especially for grading and sorting of chillies, turmeric and pepper. It is also looking to set up a pepper garbling and steam-washing facility in Kerala as well as a ‘blended spices’ facility in the next two years. The total outlay on these facilities is expected to be around Rs 4-5 crore. The location for the blended spices facility is yet to be finalised.

ITC’s spices business traces its genesis to internal synergies with the foods business’ Aashirvaad brand of spices. The business endeavours to bring global food safety standards to the fore in the Indian market, besides catering to global requirements by adhering to stringent standards of food safety across regions and countries.

Building on internal synergies, the spices business has grown over the years, increasing supplies to domestic exporters and manufacturers. It is rapidly making inroads into European, American, Japanese, South African, South East Asian and Middle Eastern markets, catering to a wide range of customers - from wholesale traders to processed food manufacturers.

Rapidly expanding market reach necessitated an expanding product bandwidth, which grew from the basic chilli, turmeric and coriander to pepper, cumin, nutmeg, mustard, fennel, fenugreek and curry powders. The product portfolio now includes powders, flakes, cracked and milled spices besides whole spices.

As part of its expansion strategy, the spices business forayed into pesticide residue-free spices and organic spices, targeting niche customers spread across the globe. The business already has huge captive cultivation of pesticide residue free chillies in India spread across the states of Andhra Pradesh, Karnataka and Tamil Nadu.