Itc Seeking Partner For Tribeni Tissues
The Rs 5,952 crore tobacco major ITC Ltd has drawn up a corporate gameplan, identifying four focus areas in which it will run businesses by itself. The businesses listed by ITC are cigarettes and tobacco, hotels, packaging, and paper.
ITC is also looking for a partner for its speciality papers division, Tribeni Tissues, and may even spin it off into a separate company if the partner insists.
Apart from cigarette tissues and components, the Tribeni Tissues Division (TTD) also produces carbonising, communication, laminating, packaging and insulating papers. ITCs plan for TTD is to get a partner who will allow it access to even better technology. ``If the partner is happy with only a technical tieup, fine, but if it insists on equity, we may even spin off the division as a separate company, said ITC sources. The key issue for ITC is to have access to world-class technology in paper.
The overall gameplan is for ITC to concentrate on areas where the company can maintain a clear edge over competition. ``It is more prudent to focus on the areas where ITC can lead, said top-level ITC sources.
The focusing exercise has become necessary since the company has accumulated several businesses over the years. ITC has also drawn up a hefty Rs 1,900 crore investment plan over five years for its core businesses.
ITCs cigarettes and tobacco businesses are spearheaded by its India Tobacco Division and India Leaf Tobacco Development (ILTD) division. ITCs strategy to expand the tobacco market has yielded good results, with the cigarettes market growing rapidly from 80 billion sticks in 1994 to over 100 billion sticks in 1997. ITCs share in this growing market has risen from 55 per cent in 1991 to nearly 67 per cent in 1996-97.
ILTD is the single largest source for quality tobacco in India and buys over 50 per cent of the annual cigarette tobacco crop in India. Its exports touched Rs 256 crore in 1996-97.
ITC has also decided to focus on its hotels business, which it feels is an ideal complement to the cigarettes and tobacco businesses. The attractiveness of the hotels business for ITC stems from the fact that apart from yielding high incomes, it also leads to property development.
ITC has a 72 per cent stake in subsidiary ITC Hotels Ltd, which manages three of ITCs own hotel properties, namely the Maurya Sheraton Hotel and Towers in Delhi, Mughal Sheraton in Agra and Chola Sheraton in Chennai.
However, ITC has decided that it does not want to run its financial services businesses itself, since it feels it does not have core competency in financial services.