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Informist, Friday, Jul 26, 2024

 

By Avishek Rakshit

 

KOLKATA - ITC Ltd has decided to pursue strategic opportunities in neighbouring countries and also expand its hotels' business into proximal markets, thereby expanding its global footprint, Chairman and Managing Director Sanjiv Puri said today.

 

Virtually addressing shareholders at the company's 113th annual general meeting, Puri said that the hotels division, which is soon to be demerged from the company and listed as a separate entity on the bourses, is set to open 60 new properties in the coming few years. It will take the total count of the hotels business to 200. ITC Ltd will hold 40% stake in ITC Hotels once it is demerged and listed on the bourses. 

 

Puri, however, said that the hotels entity, ITC Hotels Ltd, will continue to focus on managed properties that the company terms as "asset-right strategy". In April, ITC ventured into the overseas hospitality sector by opening its maiden hotel outside India. Christened ITC Ratnadipa, the hotel in Sri Lanka, has 352 guest rooms, suites, and service apartments, and caters to the meetings, incentives, conferences, and exhibition segment, also referred to as the MICE segment. It is also targeting patronage from the inbound tourists in Sri Lanka.

 

The company is exploring hospitality properties in Nepal and may also consider opportunities in West Asia, sources aware of the development told Informist. Senior officials at ITC could not be reached for a comment.

 

ITC also plans to scale up non-hotels opportunities overseas. In the financial year ended March, its subsidiary in Nepal - Surya Nepal Pvt Ltd incorporated an arm, Surya Nepal Ventures Pvt Ltd, to carry out manufacturing and distribution of fast-moving consumer goods products. Surya Nepal manufactures and sells cigarettes, biscuits, confectionery products, and incense sticks in Nepal.

 

All of ITC's business divisions, namely consumer goods, hotels, agricultural, and paper and paperboards division are mandated to engage in exports and overseas opportunities.

 

Puri said that in the last financial year, ITC and its subsidiaries earned over 90 bln rupees in foreign exchange. Of this, direct foreign exchange earnings were 72 bln rupees mainly on account of export of agricultural commodities. Foreign exchange earnings of the ITC over the last ten years aggregated nearly $9.3 bln, of which agricultural exports constituted around 60%.

 

ITC's expenses in foreign currency amounted to 27.9 bln rupees in 2023-24 (Apr-Mar), according to its latest annual report. The outgo comprises purchase of raw materials, spares, and import of capital goods. At the AGM, Puri said that 90% of the company's raw materials are procured from India.

ITC is optimistic about its future growth and views a potentially large workforce in the country to drive consumption in years to come, Puri said, adding the company also banking on the tourism sector to grow exponentially, and the country's agricultural sector diversifying into different areas that will drive the growth.

 

At 1305 IST, shares of ITC were up nearly 1% at 494.50 rupees on the National Stock Exchange.  End

 

US$1 = 83.71 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Vandana Hingorani

 

 

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