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| ITC plans Rs 13,000-cr investment in paper, hotels businesses | |
| BS Reporter / Kolkata July 25, 2009, 1:07 IST | |
Diversified business conglomerate ITC Ltd is planning to invest Rs 4,000-5,000 crore over the next five years in a new paper plant, provided it finds 1,500-2,000 acres in time.
ITC, 31.7 per cent owned by British American Tobacco, is India’s top cigarette maker and also makes consumer goods and runs the Welcome Group of hotels.
At a press conference in Kolkata today, Y C Deveshwar, chairman, ITC Ltd (pictured), said: “Acquiring adequate land for fresh investments and business expansion is a challenge in India. Nonetheless, we are looking at 1,500-2,000 acres in either of Gujarat, Madhya Pradesh and Andhra Pradesh. We intend to invest close to Rs 4,000-5,000 crore over the next five years in building a new greenfield paper plant, depending on how we scale up.”
The company currently has a 0.5 million tonne paper plant in which it invested Rs 3,000 crore.
“Our focus areas in the short term would be paper, hotels and non-cigarette FMCG businesses. Paper and packaging business has the potential to be the largest and most profitable business for us. We would also invest in building new hotel properties and are in the process of investing Rs 8,000 crore in over 10 hotels. Another focus area for us would be investments in FMCG business, mainly in its R&D and advertising and communications,” Deveshwar added.
ITC currently has a total of 6,500 rooms in India, of which 2,900 are in the luxury deluxe category. It is in the process of investing Rs 8,000 crore in building over 2,000 rooms in 10 more properties.
“The Bangalore property would open soon. We deliberately deferred the launch because the hotels business was down due to the global slowdown. In better times, we would open a few rooms of a hotel property as soon as they would be completed in order to pool in money and complete the rest of the property,” said Deveshwar.
No hostile bids for rival hotels
ITC Ltd said it was not interested in hostile takeover of hotel chains like EIH Ltd and Hotel Leelaventures.
“We are not interested in hostile takeover,” said Deveshwar, “These are good investments but if the other side ever thinks of joining hands with ITC it will come in handy, either in terms of joint ownership or handling just the marketing management.”
ITC owns 14.98 percent of EIH, which runs the Trident and Oberoi chain of hotels, and 3.72 percent of Hotel Leela through its unit, Russell Credit, stock exchange filings showed.
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