Jaipuria Institute of Management, Lucknow [2007-09]








ITC......................................................................................................................................4 Business of ITC .................................................................................................................6
COMPARISON OF THE COMPANY IN FINANCIAL YEAR-05 AND FINANCIAL YEAR-07................................................................................................................ ...................7

Financial Analysis of the Company...................................................................................8 Areas of Diversification....................................................................................................10 ITC in FMCG Sector........................................................................................................11
Cigarettes ............................................................................................................................ ....11 Snacks:......................................................................................................... ...........................16

ITC in Hotel Industry.......................................................................................................17 ITC in Agricultural Industry............................................................................................19
ITC’s E- choupal................................................................................................................ .....21

ITC in Paper Industry......................................................................................................22 ITC in Apparels.................................................................................................................24 ITC in Information Technology.......................................................................................27 Interpretation of article written by Shalesh Dhobal on ITC diversification..................28 Interpretation of article written by Sanjoy Narayan on ITC diversification..................29


"Enduring Value. For the nation. For the Shareholder."
I TC is one of India's foremost private sectors companies with a market capitalization of nearly US $ 15 billion and a turnover of over US $ 4.75 billion. ITC is rated among the World's Best Big Companies, ITC! India Limited Asia's 'Fab 50' and the World's Type Public (BSE:ITC) Most Reputable Companies by Forbes magazine, among India's August 24, 1910 Founded Most Respected Companies by Radha Bazar Lane, Kolkata, India Business World and among India's Most Valuable Companies by Headquarters Virginia House, Kolkata, India Business Today. ITC also ranks Y C Deveshwar, Chairman among India's top 10 `Most Key people K Vaidyanath, Director, CFO: Partho Valuable (Company) Brands', in a Chatterjee study conducted by Brand Finance Industry Tobacco, Foods, Hotels and published by the Economic Cigarettes, Packaged Food, Hotels, Times. Products ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Employees 20,000 (2006) Specialty Papers, Packaging, AgriWebsite Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Greeting Cards, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hotelier. Over time, the strategic forays into new
Apparel Revenue $4.75 billion USD (2006)


businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 2.8 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing. ITC'sΘ production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 21,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3,95,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement:



Business of ITC


uring the June, 07 quarter, a 12.5% value added tax was levied on cigarettes, which is expected to depress the volume+. Since ITC is a dominant player, it has the pricing power to compensate for any fall in volumes. To maintain its

dominant position in the tobacco business in the face of the rising competition, ITC has announced plans to invest around Rs.1000 million in the cigarette business. However, its non tobacco business is increasing and acquiring greater significance as the company is betting huge sums on new business. In FY07, the cigarette business accounted for around half of the ITC consolidated revenues but only 37% of its capital expenditure. Not surprisingly, its non- tobacco business is growing faster. In FY07, its non cigarette business grew 32% against 14% growth in the tobacco business. Most importantly, profit before tax from non tobacco business was up 34% against 17% growth of its tobacco business. This was achieved despite continued losses reported by non tobacco FMCG business. In the June quarter, revenues from non tobacco business grew 7% mainly, on account of a decline in the profitability of paper and paper board business. ITC is using its strength in rural sourcing network and brand building to acquire industry leadership in branded staples, ready to eat, hospitality and life style apparel segments. In the short run, it has depressed it consolidated margins and returns on capital, but many of these businesses may now start yielding results. It now plans to expand its branded packaged food portfolio by launching more products for which it has stepped up research and development spend. ITC is also expanding its hotel business and started rebranding exercise to maintain its premium status as many international chains are planning to foray into India. It is adding around 770 rooms and 100 service apartments in Bangalore and Chennai. Its paper business provides packaging solutions to its other businesses. It is also expanding in the paper business to tap Indian paper growing market. It is doubling its pulp capacity and

source: economics times


adding new paperboard machines. This will raise its paper and paper board capacity by around 37% to 4.5 lakh tones.

40 35 30 25 20 15 10 5 0


FY05 FY07


















source: prowess







Financial Analysis of the Company


n the quarter ended June, 07, ITC’s net profit grew 20% to Rs.782.87 million and net sales rose up 17% to Rs.3325.23 million. This profit growth was primarily driven by its cigarette business because of high margin and agribusiness, but its top

line growth mainly comes from non tobacco business and agro business. ITC is facing pressure on its consolidating operating margin due to continued losses by its noncigarette FMCG business and decline in the profitability for paper and paper board business. Higher advertising expanses, which grew 35% in FY07 and freight cost, which were up 31% last year, have also affected the margins. Going forward, the focus will be on the performance of its non tobacco FMCG business, which has begin to show sign of turning around.


4.7 4.6 -8.8 1.6 89.8 0.4 56.8

7.7 8.4 30.3 19.1 29.9 0.2 25.8


source: The Economic times.


ITC’s top line and bottom-line growth is likely to be marginally affected looking at its aggressive investment in hotel and other FMCG business. Its recent foray in to home and personal care also need immediate investment. At the current market price of Rs.180, the stock is valued at around 20.5 times its FY08 estimated earning per share of Rs.9. this is significantly lower than its historical price to earnings multiple of around 25 and also lower than its peers in FMCG sectors. This provides 20-25% upside over the next 12-18 months.


     

Areas of Diversification
TC∗ has transformed itself from a leading cigarette manufacturer to an umbrella group that offers a diversified product mix to enhance its brand image and reduce dependency on tobacco related products. It has forayed into the hospitality service

industry and has become a major player in the hotels segment. Its position in the FMCG (fast moving consumer goods) business is also on a growth curve; especially its confectionery and biscuits which are slated to achieve the top ranks among its peers. It has made heavy investments to strengthen its IT (information technology) segment and to compete with the big players like Infosys and Wipro. Although the ITC group is marketing its image as an ideal corporate citizen and a company that takes its social responsibility seriously, it still earns 80% of revenues from selling cigarettes and other tobacco related products. The major areas in which ITC has diversified are:  FMCG Cigarettes Food Lifestyle Retailing Greetings and stationery Safety Matches Incense sticks

 Hotels  Paperboards and Packaging   Paperboards and specialty papers packaging

 Agri-Business   Agri- exports E-choupal

 Information Technology



ITC in FMCG Sector
ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has a leadership position in every segment of the market. It's highly popular portfolio of brands includes Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake. The Company has been able to build on its leadership position because of its single minded focus on value creation for the consumer through significant investments in product design, innovation, manufacturing technology, quality, marketing and distribution. All initiatives are therefore worked upon with the intent to fortify market standing in the long term. This in turns aids in designing products which are contemporary and relevant to the changing attitudes and evolving socio economic profile of the country. This strategic focus on the consumer has paid ITC handsome dividends.


ITC's pursuit of international competitiveness is reflected in its initiatives in the overseas markets. In the extremely competitive US market, ITC offers high-quality, value-priced cigarettes and Roll-your-own solutions. In West Asia, ITC has become a key player in the GCC markets through growing volumes of its brands. ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru, Munger, Saharanpur and Kolkata. These factories are known for their high levels of quality, contemporary technology and work environment

Ready to Eat:
Keeping alive long forgotten culinary traditions, ‘Kitchens of India’ presents its range of ready-to-eat cuisines. Each one of these legendary delicacies has been created by the Master Chefs of ITC Hotels, following rare, closely guarded recipes, handed down through the ages, from one generation to the next.
Bukhara Bukhara, a village in Uzbekistan, was a meeting place for the traders from Asia and Europe. It was also a spot on the fabled Silk Route , a passage commonly used by traders, scholars and nomads. It was on this route that the unique Bukhara style of cooking was born. The Master Chefs of ITC Hotels have whipped up the delectable bite into history with this cuisine from the North-West Frontier Province with a masterpiece like Dal Bukhara. Dal Bukhara Dal Bukhara is an exquisite culinary treat made from Whole Black Lentils simmered with prized Indian Spices over a coal fire, for long hours on end.

Dum Pukht The art of ‘Dum’ cooking (cooked in its own juices) traces its origin to the times of the ‘Nawabs of Awadh’ who ruled the Northern Provinces of India during the 18th century. ‘Kitchens of India’ has currently introduced ‘Mirch Ka Salan’ in this range. Mirch Ka Salan An extravagant delicacy made from succulent green chillies, delicately cooked in a thick gravy of roasted peanuts, almonds and sesame seeds.


Kheema Mutter Ground lamb and fresh green peas cooked in mild spices together with ginger, garlic, tomatoes and herbs. Mughlai Paneer Fresh cubes of Paneer prepared with khus-khus, ground watermelon seeds and fine onion paste, spiced with coriander leaves and cardamom powder. Dakshin This cuisine reflects the tradition and culture of the southern Indian peninsula. ‘Kitchens of India’ offers you Chicken Chettinad and Chicken Stew: Chicken Chettinad Succulent chunks of tender chicken in a dark, spicy paste of curry leaves and freshly ground pepper. Showcasing the distinctive tastes and fragrances of the South. Chicken Stew Tender nuggets of chicken in a mild, coconut gravy. Gharana A pan-Indian cuisine specially created by ITC’s Hotels Master Chefs. Paneer Darbari Soft, fresh and juicy cubes of cottage cheese simmered in an aromatic tomato gravy to create an unforgettable delicacy. Chicken Darbari A superb blend of juicy and tender chicken chunks in an aromatic tomato gravy, laced with butter. Murgh Methi Discover the delights of Nawabi cuisine in every serving of Murgh Methi. Tender chunks of chicken, spiced mildly, and simmered for long hours in a gravy of green coriander and fenugreek. Paneer Malai


Fresh chunks of Paneer, sautéed with onions and green peppers, immersed in a creamy tomato sauce. Lagan ki boti Tender lamb marinated in mint & coriander and then with cashew nuts and poppy seeds, and braised in a 'Lagan' together with spring onion, chillies and saffron.


‘Kitchens of India’ Curry Pastes

A special blend of handpicked spices, created by the Master Chefs of ‘Kitchens of India’, in accordance with original, traditional recipes. Just add fresh ingredients, and cook. These are ready made pastes and there is no need to add oil, salt or spices. It’s truly the most deliciously authentic way to recreate your favorite dishes. These pastes by themselves are fully vegetarian.


Butter Chicken Curry Paste A rich, mildly spiced gravy, that follows the original, traditional Butter Chicken Curry recipe. Just add succulent nuggets of chicken and cook.

Hyderabadi Biryani Paste A rich coconut yogurt gravy, in accordance with the original, traditional Hyderabadi Biryani recipe. Just add long grained basmati rice, tender pieces of chicken or lamb and cook.

Fish Curry Paste A rich, mildly spiced gravy, according to the original Fish Curry recipe. Just add fresh slices of fish and cook.

Vegetable Biryani Paste A rich, mildly spiced gravy, faithful to the original, traditional Vegetable Biryani recipe. Just add long grained basmati rice, garden-fresh vegetables and cook.

Chicken Curry Paste A thick, tomato-onion gravy, that follows the original, traditional Chicken Curry recipe. Just add succulent nuggets of chicken and cook.

Mutton Curry Paste A rich, mildly spiced, aromatic gravy, in keeping with the original, traditional Mutton Curry recipe. Just add tender pieces of lamb and cook.


Sunfeast In 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie and Cream Biscuits. Sunfeast’s brand essence, "Spread the Smile" connotes happiness, contentment, satisfaction and pleasure. The mascot Sunny reinforces the emotional aspects of the brand.

Sunfeast immediately established itself as a provider of innovative and distinctive products - Sunfeast Marie was launched in an innovative orange flavour and the 'Sunfeast Dream Cream' range includes new flavours as well as flavour enhancers. The Sunfeast Dream Cream range is currently available in 8 variants. The Company has also introduced 'Sunfeast Dark Fantasy', a dark chocolate and vanilla cream offering for the premium segment in select markets. Riding on the success of its initial offerings, ITC also entered the milk biscuit category with Sunfeast Milky Magic biscuits. Apart from milk which helps mental growth, these biscuits also contain the finest quality wheat aiding physical growth. In the last two years, the Sunfeast biscuits portfolio has been enhanced to include salted crackers and cookies. The 'Sunfeast Snacky' salted crackers are available in 2 unique variants – ‘Chilli Flakes’ and ‘Classic Salted’. Sunfeast's latest offering, 'Sunfeast Special' biscuits are also available in select markets. The Sunfeast Special range currently includes cookies in two variants – Butter and Cashew, as well as cream biscuits in two variants – Choco and Orange. The Sunfeast product portfolio has been further expanded to include healthy snacking options. 'Sunfeast Pasta Treat' is a whole wheat based instant pasta for children. After the tremendous success of the 4 initial flavours, the instant Pasta range has been extended with two new exciting flavours – ‘Pizza’ and ‘Chicken’. The pasta segment was further expanded with the launch of 'Sunfeast Benne Vita' in 4 innovative variants.

ITC currently has two brands in the confectionery segment - 'mint-o' and 'Candyman'. 'mint-o' was acquired by ITC from Candico in March 2002. ITC re-launched the compressed mint offering, across all major markets in India, with new and improved product and packaging. Available in the regular mint flavour with added blue specks to enhance consumer experience, mint-o is also offered in innovative 'Orange mint' and 'Lemon mint' flavours. 'mint-o' is available in two sizes – rolls of 20 and 6, capturing the international essence of ‘youthful cool’ ITC launched 'mint-o Fresh' in October 2004. An ‘active’ mint deposited candy, mint-o Fresh is available in two refreshing mint flavours across all markets. Its launch extended the footprint of the 'mint-o' brand in line with the strategy of adding excitement and contributing to the growth of the confectionery category. 'mint-o Fresh' is especially targeted at the adult consumer seeking a


basket of mint-based products across price points.

ITC launched the 'Candyman' range of confectioneries in August 2002. Led by the 'Candyman Fruitee Fun' range of assorted fruit flavours ('Wild Banana', 'Pineapple Punch', 'Orange Josh' and 'Mango Delite'), the 'Candyman' portfolio now includes deposited candy products like 'Candyman Butterscotch Licks' and 'Candyman Éclairs' (Choco flavoured as well as Vanilla Cream centre inside a Butterscotch outer shell). The coffee toffee segment also saw the successful launch of 'Candyman Cofitino' in November 2005. Two new products – 'Candyman Natkhat Mango' and 'Candyman Maha Mango' were launched recently. The 'Candyman' range of confectionery is targeted at ‘fun-filled, naughty kids’ who seek a delightful candy experience through a range of candy types and flavours. Bingo! ITC's new snacks brand Bingo! marks the company's foray into the fast growing branded snacks segment. The launch of Bingo! represents ITCs' fifth major line of foods business after the highly successful Staples, Biscuits, Ready-to-Eat and Confectionery businesses. Bingo! will leverage the platform of youthful and innovative snack offering.


The launch of Bingo! is symbolic of ITCs' distinct approach of introducing innovative and differentiated products in a largely undifferentiated market place. The initial offerings from Bingo! include an array of products in both Potato Chips & Finger Snacks segment. The Potato Chips offerings comprise four innovative variants inspired by the snacking habits of different parts of the country as well as Masalas, Salted and Tomato flavours. Additionally, a south-inspired dairy option has also been introduced under the potato chips offering.

ITC in Hotel Industry
ITC Limited entered the hotels business in 1975 with the acquisition of a hotel in Chennai, which was rechristened Hotel Chola. Since then the ITC-Welcomgroup brand has become synonymous with Indian hospitality. Today amongst India's finest and fastest growing hotel chains, it consists of over 70 hotels across as many destinations in India. These include super deluxe and five star hotels, heritage palaces, havelis and resorts and full service budget hotels.


The 440-room ITC Maurya at New Delhi is not only amongst the leading business hotel in the country, but is in a class by itself. Complete with the 'ITC One', the hotel has played host to a galaxy of world dignitaries, including Bill Clinton and Bill Gates. In fact, even as he was leaving the White House, the former US President nostalgically recalled the memories of a fabulous Indian meal he and his family had at the Bukhara restaurant in the hotel. Bukhara has been declared the Best Indian Restaurant in the world, by 'The Restaurant Magazine', UK The 386-room ITC Maratha, opened in February 2001, is perceived as amongst the leading and the finest properties in Mumbai, designed in a grandiose classic style, the hotel pays tribute to Mumbai's colonial roots and the spirit of the Great Marathas.

In keeping with its plan to have a presence in every major business destination in India, ITC-Welcomgroup unveiled one of Asia's finest business resort, the 238-room ITC Sonar in Kolkata on December 31, 2002. Another landmark hotel - the ITC Grand Central in Parel, Mumbai was formally inaugurated in January 2005. This five star deluxe property with 242 suites and rooms offers international standards of service, state of the art amenities and culinary excellence. ITC Mughal at Agra, a proud recipient of Asia's first Aga Khan Award for Architecture, is an outstanding resort hotel, lavishly spreading across 35 acres of beautifully landscaped Mughal gardens.

ITC-Welcomgroup also pioneered a holistic concept of "branded accommodation" in the hospitality industry. It was the first to launch the powerful idea of a 'Hotel within a Hotel' by segmenting and branding the hotel services. It created the exclusive 'ITC One', 'The Towers' and the 'Executive Club' each catering to the needs of the global business traveller with unmatched quality and a range of services. In 2007, ITC-Welcomgroup entered a new phase in its collaboration with Starwood Hotels & Resorts. ITC-Welcomgroup now has an exclusive tie-up with Starwood in bringing its premium brand, the ‘Luxury Collection’, to India. The seven hotels which are part of this collection are: ITC Maurya in Delhi, ITC Maratha in Mumbai, ITC Sonar in Kolkata, ITC Grand Central in Mumbai, ITC Windsor in Bengaluru, ITC Kakatiya in Hyderabad and ITC Mughal in Agra. The agreement also includes the rebranding of WelcomHotel New Delhi as a Sheraton, while the Chola and the Park in Chennai, and the Rajputana in Jaipur retain their Sheraton connections. The Welcome Heritage brand brings together a chain of palaces, forts, havelies and


resorts that offer a unique experience. Welcom Heritage endeavours to preserve ancient royal homes and the historical Indian grandeur, opulence of romance, valour and adventure for the future Indian generations. Welcom Heritage Hotels, provide a fine range of hotel services inside these architectural legacies present in Rajasthan, Punjab, Himachal Pradesh, Madhya Pradesh, Uttaranchal, Jammu & Kashmir, West Bengal, Tamil Nadu, Haryana and Karnataka.

ITC-Welcomgroup was also the first to brand its cuisine. The Bukhara, the Dakshin and the Dum Pukht are today powerful cuisine brands, which delight connoisseurs in restaurants in several ITCWelcomgroup hotels. Others included Dublin, West View and the Pan Asian.

Fortune hotels are a part of the well thought-out growth strategy that brings out the mid-level business and leisure traveler under the ITC-Welcomgroup umbrella, offering full service properties without compromising on quality. With a strong presence at Ahmedabad, Thiruvananthapuram, Calicut, Darjeeling, Jamshedpur, Vapi, Hyderabad, Gurgaon, Indore, Ootacamund, Madurai, Jodhpur, Tirupati and Port Blair, it will be shortly commissioning several more hotels across India.

ITC in Agricultural Industry
ITC's International Business Division (IBD) is the country's second largest exporter of agriproducts with exports of over Rs. 1000 Crores (Rs. 10 billion). Its domestic sales of agriproducts are in excess of Rs. 1500 Crores (Rs. 15 billion). It currently focuses on exports of :
• • •

Feed Ingredients – Soyameal Foodgrains - Rice (Basmati & Non Basmati), Wheat, Pulses Edible Nuts - Sesame Seeds, HPS Groundnuts, Castor oil


• • •

Marine Products - Shrimps and Prawns Processed Fruits - Fruit Purees/Concentrates, IQF/Frozen Fruits, Organic Fruit Products, Fresh Fruits Coffee & Spices - Coffee, Black Pepper, Chilly, Turmeric, Ginger, Celery and other Seed Spices

Although one of the relatively younger business divisions of ITC, it has, in a short span established itself as a first-choice supply chain partner of several leading international customers. Its major customers include Cargill, Marubeni, Toepfer, among others, who source agriculture commodities and food products from India. Its customer relationship management has enabled it to achieve a very high reputation for quality, reliability and value added services. 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 webenabling the Indian farmer. Christened 'e-Choupal', ITC's web plan for the farmer centres around providing Internet kiosks in villages. Farmers use this technology infrastructure to access on-line information from ITC's farmerfriendly website. Data accessed by the farmers relate to the weather, crop conditions, best practices in farming, ruling international prices and a host of other relevant information. Currently, the 'e-Choupal' website - - provides information to farmers across the nine States of Madhya Pradesh, Haryana, Uttaranchal, Uttar Pradesh, Rajasthan, Karnataka, Maharashtra, Andhra Pradesh and Kerala. ITC plans to extend the 'e-Choupal' to cover 10 million farmers across 100,000 villages covering 15 Indian states. Following the impressive success of e-Choupal, the Company unveiled the first 'Choupal Saagar' near Sehore in Madhya Pradesh in August 2004. Eighteen more 'Choupal Saagars' have commenced operations in the states of Madhya Pradesh, Maharashtra and Uttar Pradesh. The 'Choupal Saagar' is a rural hypermarket which provides multiple services under one roof. It creates a platform for farmers to sell their produce. Farmers can also buy quality products for their farm and household consumption from 'Choupal Saagar'. These rural malls also provide farmers the invaluable additional services of soil testing, banking, insurance, medical facilities and restaurant. Such malls, in synergistic combination with the e-choupal network, serves as the core infrastructure to support ITC's rural distribution strategy. Over the next 7-10 years ITC plans to open over 700 such hypermarkets. The business is progressing a pilot project for retailing fresh fruits and vegetables. Three Choupal Fresh Cash & Carry Stores are currently operational at Hyderabad, Pune & Chandigarh.The Company has set up a complete warehousing and cold chain infrastructure for ensuring the availability of fresh products in the market, besides direct linkages with the farmers for sourcing farm fresh produce.


In Processed Fruits category, ITC exports from HACCP Certified plants to Western Europe, North Africa, Mid-East , Japan and North America, a wide range of Processed Fruits products made from Mango (Alphonso, Kesar & Totapuri) , Guava , Papaya ,& Pomegranate for Industrial and Consumer use. ITC is the leading Indian exporter of Organic Fruit Products Certified to European (EC 2092/91) & US ( NOP) Standards. Fresh Table Grapes & Pomegranates are sourced from ITC's EUREPGAP Certified Farmer groups & retailed through prominent supermarkets like Sainsbury's & Albert Heijn in Europe , Daiei in Japan. ITC's countrywide network of procurement teams, handling agents and contemporary warehousing facilities enable it to source quality merchandise even at short notice. ITC's processors are handpicked reliable outfits which ensure hygienic processing and modern packaging. Strictest quality control is exercised at each stage to preserve the natural flavour, taste and aroma of the various agri-products.

ITC has been a significant exporter of seafoods from India since 1971. It exports frozen as well as cooked shrimps and other seafood products to Japan, USA and Europe. Its well-known brands include Gold Ribbon, Blue Ribbon, Aqua Kings, Aqua Bay, Aqua Feast and Peninsular. ITC's International Business Division continues to use innovation as its core strategy to retain its position as the one-stop shop for sourcing agri-commodities from India.

ITC’s E- choupal
ITC’s International Business Division, one of India’s largest exporters of agricultural commodities, has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis. The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others. 21

The Value Chain - Farm to Factory Gate:

‘e-Choupal’ also unshackles the potential of Indian farmer who has been trapped in a vicious cycle of low risk taking ability > low investment > low productivity > weak market orientation > low value addition > low margin > low risk taking ability. This made him and Indian agribusiness sector globally uncompetitive, despite rich & abundant natural resources. Such a market-led business model can enhance the competitiveness of Indian agriculture and trigger a virtuous cycle of higher productivity, higher incomes, enlarged capacity for farmer risk management, larger investments and higher quality and productivity. Further, a growth in rural incomes will also unleash the latent demand for industrial goods so necessary for the continued growth of the Indian economy. This will create another virtuous cycle propelling the economy into a higher growth trajectory.

ITC in Paper Industry
ITC is one of the world's most modern and contemporary manufacturers of packaging and graphic series of boards. ITC's Paperboards business has a manufacturing capacity of 360,000 (TPA) tonnes per annum and is India's market leader across all carton-consuming segments including cigarettes, foods, beverages, pharma, personal care & toiletries, durables and match shells. ITC makes some of the premium graphic boards used for greeting cards , covers, sleeves, tags and playing


cards. The Company produces both Virgin and Recycled boards spanning the full requirement of a packaging customer. The erstwhile ITC Bhadrachalam Paperboards Limited was incorporated in 1975. It set up an integrated pulp and paper/board manufacturing facility in 1979 at Bhadrachalam in Andhra Pradesh in South India, 300 kms. east of Hyderabad. Since then, the mill facilities have been continuously upgraded to achieve internationally benchmarked quality standards and operational efficiencies. In 1998, the Paperboards business commissioned a new production line for coated boards. This production line incorporated Paper Machine 4, with original capacity of 120,000 tonnes per annum (TPA) and finishing & packing lines sourced from internationally renowned suppliers. This machine has been fitted with a sophisticated 'Web Detection and Inspection system' and since been modernised further with the addition of the latest web forming technology. The PM4 board machine can deliver international quality boards for Cigarette, Liquid, Food and Pharma Packaging by providing a flawless surface for print reproduction. To meet the growing requirement for high quality paperboards , PM5 was commissioned in 2003 with a capacity of 80,000 TPA. In September 2002, ITC's Bhadrachalam Paperboard Unit commissioned a 110,000 TPA Elemental Chlorine Free (ECF) fibre line. This is a state-of-the-art fibre line and the only one in India, which meets effluent norms, set by the Ministry of Environment and Forests of the Government of India and Pollution Control Boards. The product range has also been enhanced as ECF pulp uniquely fulfills the demand for food-grade packaging and environment-friendly paper. To meet its growing need for bleached pulp, a second ECF pulp line with a capacity of 120000 TPA is now nearing completion at Bhadrachalam.

ITC is the largest exporter of coated boards from India. The Company exports nearly 15 per cent of the coated boards it produces. Its coated boards fulfill exacting customer requirements in Malaysia, Sri Lanka, Bangladesh, Iran, Australia, UAE, UK, Italy, Poland and Russia. ITC has set up India's first world-class plant for the manufacture of premium Cast Coated Boards that meet highly sophisticated packaging and printing requirements. The Unit at Bollaram has been expanded further to accommodate specialized converting production lines. ITC has added a modern Poly-extrusion line to its production facility, to meet the


growing demand for food packaging and beverage cups. A 2nd poly-extrusion line is due for commissioning in Jan 2008 , to meet the growing demand for barrier boards. The SuperCalendering line installed at Bollaram Unit near Hyderabad has also added Art Boards and Ivory Cards to its product range. ITC has also pioneered the development of Liquid Packaging Boards and Plasterboard liners. Continuous product development has reinforced ITC's market leadership in the Paperboards business. ITC's Paperboards business has a strong customer focus. The Company's Paperboards business devoutly practices a 'TPM' philosophy during each stage of manufacture. Lean management techniques have also been introduced in making the operations more responsive and efficient. Statistical Process & Quality control supplement the state-of-the-art on-line process controls and scanning systems in the production lines. ITC is the premier manufacturer of Specialty Papers in India, with a diversified product portfolio. ITC's Specialty Papers are used in the manufacture of opaque lightweight fine printing papers, cigarettes, papers for decorative laminates, electrical insulation-grade papers , fireworks fuse tissue and automotive filter paper. This Division pioneered the manufacture of Specialty Papers for the Indian cigarette industry in 1949. It currently offers a comprehensive range of Cigarette Tissues, Plug Wrap, Tipping Base, Printed tipping papers and Metallising Base. The Specialty Papers Unit of PSPD at Tribeni, Chandrahati, West Bengal aims to reach out and fulfill existing and emerging customers needs. The Unit reconfigures systems and processes to meet specific customer requirements. Quality control processes at the Unit are designed to ensure consistent high quality at every stage of manufacture. On-line monitoring and documentation of production parameters are carried out for continuous correction and updation of quality standards.A Product Development Team ensures Total Quality Management (TQM) in all operations. The TQM group closely dovetails its operations with marketing, production and research teams to ensure international standards in products and services. The business creates long-term product development solutions on the basis of customer specifications and market trends.ITC has demonstrated strong capability in product development and research in pulp and paper. The Company has collaborated with the United Nations Development Programme (UNDP) and the Government of India on research programmes to develop high quality pulp. The Division exports cigarette tissues and décor paper for laminates to Iran, Turkey , Nepal, and Bangladesh

ITC in Apparels
ITC’s Lifestyle Retailing Business Division has established a nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed wear, Wills Clublife evening wear, fashion accessories, Essenza Di Wills – an exclusive range of fine fragrances and bath & body care products for men and women and Fiama Di Wills – a range of premium shampoos and shower gels. Wills Lifestyle has also introduced Wills Signature, designer wear by leading designers of the country. With a distinctive presence across segments at the premium end, ITC has also established 24

John Players as a brand that offers a complete fashion wardrobe to the male youth of today. The recent launch of Miss Players with its range of trendy fashion wear for young women has been a successful addition to the youth portfolio. With its brands, ITC is committed to build a dominant presence in the apparel market through a robust portfolio of offerings. This season, Wills Lifestyle presents a complete fashion wardrobe that complements every facet of your lifestyle at work, when you're relaxed, while you party and for those special occasions. Wills Lifestyle has been established as a chain of exclusive specialty stores providing the Indian consumer a truly 'International Shopping Experience' through worldclass ambience, customer facilitation and clearly differentiated product presentation. Our stores have established themselves as preferred shopping destinations in the prime shopping districts across the country. At Wills Lifestyle, customers can browse at leisure, and shop in a relaxed and pleasing atmosphere. The use of space is refreshing, which is reflected even in the spacious changing rooms. Every store offers an international retailing ambience with the extensive use of glass, steel and granite, reflecting the most contemporary trends in store design, thereby creating a splendid backdrop for the premium offerings. superbrand 2006 was awarded to Wills Lifestyle by the Superbrands Council of India. At the Images Fashion Awards 2001 & 2003, Wills Lifestyle was declared ' The Most Admired Exclusive Brand Retail Chain of the Year'. Wills Lifestyle is now title partner of the country’s most premier fashion event - Wills Lifestyle India Fashion Week. Taking the celebration of the event to its stores, Wills Lifestyle has partnered with leading designers Rohit Bal, Rajesh Pratap Singh, Manish Malhotra and Rohit Gandhi - Rahul Khanna to create a new edition of Designer wear, which is now available at Wills Lifestyle Wills Sport, fashionable relaxed wear for men and women has, over fifteen seasons, become the vibrant face of contemporary fashion. At the Images Fashion Awards 2001, Wills Sport was declared ‘The Most Admired Brand Launch of the Year'. Following this, Wills Sport was declared 'The Most Admired Women's wear Brand of the Year', at Images Fashion Awards 2002. This season, Wills Sport presents a collection designed to complement your exuberant lifestyle. Vibrant designs create magic in breezy fabrics. Racy stripes and enchanting details add charm to the purest linen and cotton. Wills Classic work wear was launched in November 2002, providing the premium consumer a distinct product offering and a unique brand positioning. Featuring luxurious fabrics crafted to perfection with the most contemporary styling, Wills Classic work wear is positioned as the brand for new age leaders, who are changing the rules of business and encouraging a dynamic culture of enterprise, innovation and teamwork. Showcasing the 25

epitome of new age luxury. Featuring the finest shirts, crafted in Italy. Complemented by exquisite trousers and jackets, made by European master craftsmen. Experience a new language of charming sophistication this season.

Wills Lifestyle complements the range of apparel with a tempting choice of fashion This season a wider choice of accessories across ties, cuff links, socks, caps, hand belts, eyewear and shoes. With the premium formal and relaxed jackets in the Lifestyle will continue to offer the definitive season.

premium accessories. will be offered bags, wallets, introduction of range, Wills look of the

Continuing with its philosophy of bringing to Indian consumers world class products that enrich the quality of their lives, ITC launched Essenza Di Wills - an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Inizio, the signature range under Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and women (Inizio Femme). The rich and sensual fine fragrances are all day offerings designed by the leading international fragrance houses in France. The personal care range includes a host of bath and body care products that share the same olfactory signature of the men’s and women’s fine fragrances to offer you a harmonized fragrance experience. ITC forayed into the youth fashion segment with the launch of John Players in December 2002 and John Players is committed to be the No. 1 fashion brand for the youth. This foray leverages ITC’s proven competencies in understanding consumer insights, brand building and design capabilities. Hrithik Roshan, Superstar and Youth Icon, with his innate style, vibrancy and playfulness best personifies the core attributes of the brand as its ambassador


ITC in Information Technology
ITC InfoTech, a global IT services company, is today one of India’s fastest growing IT and ITES service providers. Since it's inception in October 2000, the company has established itself as key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers. While an enterprise range of technology world class quality processes form the InfoTech’s cutting-edge IT service domain focus ensures that IT and It’s places business needs ahead of capabilities and foundation of ITC strength, a sharp delivery always technology.

The company enjoys the rare advantage of having a practitioner's expertise with a strong vertical focus in Consumer Packaged Goods (CPG) and Retail, Travel, Hospitality and Transportation, and Manufacturing - domains that its parent, ITC Limited, has traditionally dominated - as well as in the main stay of technology service providers: Banking, Financial Services and Insurance. ITC InfoTech offers services through a global delivery platform with a strength of over 2,000 employees and delivery centers across North America, Europe and Asia-Pacific that serve Fortune-listed companies in 42 countries. ITC InfoTech conforms to the highest standards in international process quality, with ISO 27001, ISO 9001, SEI CMM Level 5 and BS 7799 accreditations. These reflect the company’s ongoing enterprise-wide focus to ensure that every engagement, program and project delivers international quality consistently. Industry Recognition: Premier analyst and market research agencies have recognized ITC InfoTech’s position as the preferred IT partner. It has been:
     

Featured amongst Top 100 Global Outsourcing Companies in the Leaders category - International Association of Outsourcing Professionals Ranked amongst Top 10 Specialty Application Development Providers - Global Services, CMP Media Named amongst major Indian global service providers for PLM implementation and engineering services - ARC Advisory Listed as a leading Player in CRM & CPG Space – Forrester Mentioned amongst Top Offshore SAP Service Providers - Forrester Referred to as a Key Offshore Testing Services Provider - AMR Research


Interpretation of article! written by Shalesh Dhobal on ITC diversification
ITC has been a leader in the tobacco business, but it realize from the up coming trends that remaining with a single business is not a noble thought, moreover the company was threatened of the anti-tobacco campaign. Therefore the company decided to venture into InfoTech with ITC InfoTech, foods via Kitchens of India, greeting cards through Expressions and lifestyle retailing through Wills Sport. Each of these is intended to draw revenues of at least Rs. 250 crore by 2005. ITC was a cash rich company with a liquidity of Rs.8816 million in the cigarette business, even though the company understood the need and usefulness of diversification. The writer in the article is mainly concerned with the way ITC spreads its wings in the lifestyle segments, he writes:” forty-five stores in 34 cities in just under a year, selling an expensive fashion brand of relaxed-wear. If retail swamp-out and brand salience were the goals, ITC’s Wills Sport would be on a victory lap already.” The company has started its retail stores not only in Indian metros but also in the small towns like Ranchi, Jabalpur, Gwalior, Belguam, Ernakulam etc. the article also talks about the strong market campaign done by the company, it also describe how the company has used its brand image to attract the Indian youth. It also tells about the strategy adopted by the company to differentiate itself in this segment, like the company is outsourcing its designs form the American Design Intelligence Group (ADIG), a San Francisco, US-based garment and retail consultancy. Now it has its own six-member team, even as it continues a tie-up with Science & Designs, an Italian fashion design house – through which it keeps a watch on hot western labels such as Banana Republic and Armani Exchange. The author believes that by adopting these strategies ITC will surely be successful in its new business.

taken from article published in economic times


Interpretation of article∗ written by Sanjoy Narayan on ITC diversification
“BLENDING DIVERSE SKILLS AND LEVERAGING ITS DISTRIBUTION MUSCLE, THE TOBACCO GIANT IS UNLEASHING A WELTER OF NEW BUSINESSES. AN INSIDE ACCOUNT OF THE SILENT REVOLUTION.” These are the words from the mouth of the editor of business today Sanjoy Narayan. The writer says that the company has diversified from a cigarette giant to a fully diversified company in a very efficient manner. The article talks about how a tobacco company, moves on the path of diversification and started manufacturing confectionary, fast food, apparels etc and the company is actually doing well. The article describes the lateral thinking of the chairman and the persons who are running the company, why they have decided to diversify and on what grounds. The articles describes about the market capitalization of the company in various fields in which it has diversified, it also talks about ties and ventures of the company with various firms. It also talks about the new ventures of ITC in various other fields and about the future plans of the company.

taken from the article published in business today