Cost-effective cold chains to be new growth driver for ITC agri business

Diversified conglomerate ITC is pursuing a long-term strategy to build a cost-effective cold-chain that would lend a new growth driver to company's agri business while contributing to raising rural incomes, Chairman Y C Deveshwar said at the company's annual general meeting on Friday.

The company's ongoing investment in setting up integrated consumer goods manufacturing and logistics facilities (ICML) across the country provide a unique opportunity to co-locate a distributed network of cold-chain infrastructure at a shared marginal cost, he said.

ITC's ICMLs comprise state-of-the-art food processing plants and are being established at strategic locations close to markets. 

Outlining the vision, Deveshwar said, the large areas of ICMLs together with the built-up rooftops of the factories and warehouses can be utilised for solar power generation that can reduce the cost of cold chain operations including that of transportation through electric vehicles.

A pilot project will be carried out in the future and the scaling up will take place together with the establishment of additional mega food processing plants, taking the total number to 20 over the next 5-10 years. 

ITC has recently forayed into perishables segment and several products are being progressively introduced in the market in fresh, dehydrated, puree and frozen formats.

Some of the recent launches in this segment include apples, potatoes under the Farmland brand, and frozen prawns under the ITC Master Chef brand.

Deveshwar said that in the last fiscal the company had launched 30 new products in the FMCG business. He also reiterated ITC's "audacious" vision of Rs 1,00,000 crore of revenue from branded consumer goods by the year 2030.

Over 80 per cent of the operating capital and about 90 per cent of employee base of the ITC group are now deployed in the non-cigarette businesses, Deveshwar told shareholders. 

On the healthcare foray, responding to shareholder queries, Deveshwar said, ITC had little knowledge and expertise and would not rush into it. He explained that the company, for this reason, had not participated in the Fortis bid. "Our managing director has put in place an internal team to evaluate opportunities," he said.