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ITC Foods plans own facility to make biscuits
The Hindu Business Line - 27 Mar 2006

K. Giriprakash

Share of non-tobacco sectors matches tobacco's

ITC Foods, which currently sources its requirements for biscuits from contract manufacturers, has decided to set up its own manufacturing facilities in Karnataka and Uttaranchal.

And, for the first time since ITC diversified into non-tobacco sectors, the share of the latter in value terms will almost equal that of tobacco this year.

"As of now we source our requirement from contract manufacturers. We will now have our own manufacturing facilities," The ITC Foods Chief Executive Officer, Mr Ravi Naware, told Business Line.

The total capacity of these two factories will be around 10,000 tonnes and this will be part of the Rs 450-crore investment plan, which was announced last year.

In terms of value, Britannia and Parle have around 38 per cent share each in the Rs 4,500-crore biscuit market. ITC Foods, which is one of the latest to enter the market, is the third largest with a share of 8 per cent. ITC Foods which makes Sunfeast brand of biscuits, has moved up the pecking order in terms of market share in the biscuit segment quickly. In 2004-05, its share was a mere 4.5 per cent.

New products planned

"We have a differentiated product portfolio and have been able to retain the quality of the products," Mr Naware said.

There are also plans to introduce newer products and at least one of the phased out products will be reintroduced next fiscal. ITC Foods is also looking at getting into the health food sector, though no plans have been firmed up.

Mr Naware said in the confectionery space, new lines of production have been added in some of its factories.

"We have achieved a good growth in the confectionary segment with one of the products getting a 17 per cent share within 15 months of its launch," he said.

RTE segment

In the ready-to-eat segment, ITC Foods already has a between 35 per cent market share with MTR leading the pack.

ITC Foods also plans to take its products in the spices category across the country.

In the branded atta category, it has a 45 per cent market share, nearly doubling its share from 2004-05.