Non-tobacco biz progressing; asset-right model for hotels: ITC

Diversified conglomerate ITC's non-tobacco business has been showing progress in terms of registering higher gross profit and the company would adopt the "asset-right" model for hotels, a top official said today.

ITC Managing director Sanjiv Puri said the revenues from the non-tobacco business was 59 per cent of the overall revenues and operating capital employed was Rs 19,000 crore.

"There is progress in the newer businesses in the non-tobacco segment. Categories in the non-tobacco business which had acquired scale now has the capacity to provide better financial returns going by the EBIDTA (Earnings Before Interest, Taxes, Depreciation and Amortization)," Puri told reporters at a news conference here today.

"We are investing in a new ITC by creating a new efficient supply chain. There are gestating costs in fast moving consumer goods. We would be watchful of the costs structure involved," he said.

Puri said that company would enter new categories this year, like the previous year.

Regarding the hotels business, he said the company would follow the asset-right model by owning properties and managing for others.

Presently, 60 per cent of the hotels were owned and 40 per cent managed. This proportion would go to 50:50 in the next few years, Puri said.

ITC has a pipeline of six new properties including the only overseas one at Colombo, he said.

Puri said that there was pressure on tobacco business due to regulatory environment and smuggling from abroad.

On the proposed forray into healthcare, he said that the board had authorised the management to study the segment and submit a plan in a year's time.

Earlier, speaking at the company's AGM here, chairman YC Deveshwar said an integrated scheme named 'Baareh Mahine Hariyali' was launched which was aimed at maximising farm utilisation throughout the year with a view to multiply farmers' income.

Deveshwar said that ITC was making ongoing investments in setting up the Integrated Consumer Goods and Logistics Facilities (ICML) through a network of cold-chain infrastructure.

He said the company had taken 'an audacious vision' of earning Rs 1 lakh crore from branded consumer products by 2030.