ITC Limited

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ITC Limited
Type Public
Traded as BSE500875
NSEITC
BSE SENSEX Constituent
CNX Nifty Constituent
Industry Conglomerate
Predecessor(s) W.D. & H.O. Wills
Founded August 24, 1910[1][2]
(as Imperial Tobacco Company of India)
Headquarters Kolkata, West Bengal, India[3]
Key people Y C Deveshwar, (Chairman)[4]
Products Tobacco, hotels, paperboards & specialty papers, packaging, agri-business, packaged foods & confectionery, IT, branded apparels, personal care, stationery, safety matches and other FMCG products
Revenue Increase INR 45,102 Crores (US$ 8.31 billion) (2012-13)[5]
Operating income Increase INR 11,106 Crores (US$ 2.05 billion) (2012-13)[5]
Net income Increase INR 07,608 Crores (US$ 1.40 billion) (2012-13)[5]
Total assets Increase INR 35,353 Crores (US$ 6.51 billion) (Mar 2013)[5]
Total equity Increase INR 23,158 Crores (US$ 4.27 billion) (Mar 2013)[5]
Employees 25,959 (Mar 2013)[6]
Divisions ITC Infotech, Surya Nepal Pvt. Ltd.
Website www.itcportal.com

ITC Limited or ITC is an Indian conglomerate headquartered in Kolkata, West Bengal.[3] Its diversified business includes five segments: Fast Moving Consumer Goods (FMCG), Hotels, Paperboards & Packaging, Agri Business & Information Technology.[7]

Established in 1910 as the Imperial Tobacco Company of India Limited, the company was rechristened as the Indian Tobacco Company Limited in 1970 and further to I.T.C. Limited in 1974. Finally, the periods in the name were removed in September 2001 for the company to be renamed as ITC Ltd.[2] The company completed 100 years in 2010[8][9][10][11] and as of 2012-13, had an annual turnover of US$ 8.31 billion[12] and a market capitalisation of US$ 45 billion.[6] It employs over 25,000 people[6] at more than 60 locations across India and is part of Forbes 2000 list.

ITC claims to be the only company in the world of comparable dimensions to be Carbon Positive, Water Positive and Solid Waste Recycling Positive.[12]

History[edit]

ITC was formed on 24 August 1910 under the name of Imperial Tobacco Company of India Limited,[2] and the company went public on 27 October 1954.[1] The earlier decades of the company's activities centered mainly around the manufacture of tobacco products and their sales. However, owing to a decline in government support for producers and manufacturers of tobacco in the post-independence era,[13] the company starting looking towards other avenues of operations. In the 1970s, it began making a foray into select non-tobacco businesses while at the same time making an attempt to reduce the foreign equity holding in the company to about 40%.[1]

In 1975, the company entered the hotels business with the acquisition of a hotel in Chennai, which was rechristened as the 'ITC-Welcomgroup Hotel Chola' (now renamed to MyFortune, Chennai).[2] In 1979, ITC entered the paperboards business by promoting ITC Bhadrachalam Paperboards Limited.[1] The company was absorbed into ITC as the Bhadrachalam Paperboards Division in 2002[14] and is today one of the leading paperboard manufacturers in India.[15]

In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepali and British joint venture, with the shares divided between ITC, British American Tobacco and various independent domestic shareholders in Nepal. In 2002, Surya Tobacco became a subsidiary of ITC and its name was changed to Surya Nepal Private Limited.[16]

In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of Expressions range of greeting cards.[17] A line of premium range of notebooks under the brand Paperkraft was subsequently launched in 2002, while the Classmate series was launched in 2003 ostensibly to reach a wider consumer group.[18] In 2008, ITC repositioned the business as an Education and Stationery Products Business and launched India's first environment friendly premium business paper under the “Paperkraft” brand.[2]

In 2000, ITC entered the lifestyle retailing business with the Wills Sport range of casual wear for men and women.[19] Also in 2000, the company spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited, to more aggressively pursue emerging opportunities in IT and IT-enabled services area.[20]

ITC's foray into the Foods business began in August 2001 with the introduction of Kitchens of India brand of ready-to-eat gourmet Indian recipes.[21] In 2002, ITC entered the confectionery and staples segments with the launch of the brands Mint-o and Candyman confectioneries and Aashirvaad atta (wheat flour).[2][22] 2003 witnessed the introduction of Sunfeast range of biscuits,[23] while in 2007, ITC entered the fast-growing branded snacks category with the Bingo! label of packaged wafers and chips.[24]

In 2002, ITC entered the safety matches business with the acquisition of WIMCO Limited.[25] ITC's entered the Agarbattis (incense sticks) business in 2003, selling it's products under the Mangaldeep brand.

ITC launched Essenza Di Wills - a range of fragrances and bath & body care products for men and women - in July 2005.[26] The company subsequently launched the Fiama Di Wills range of Shampoos, Shower Gels and Soaps in 2007. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment in 2007 and Vivel De Wills & Vivel range of soaps and shampoos in 2008.[27]

In 2010, ITC launched its handrolled cigar - Armenteros - in the Indian market, to be made exclusively available at select hotels, fine dining restaurants and premier clubs.[28]

The company embarked onto the online sales model for the first time in 2014 with the launch of the Wills Lifestyle e-store, alongside sales on third-party e-commerce websites[29] In May 2014, ITC completed the acquisition of a Bangalore based natural juice brand Balan Natural Foods B and is likely to launch the new segment by September.[30]

Products and Brands[edit]

Gold Flake cigarettes

Tobacco products[edit]

Cigarettes: In 2012-13, ITC earned a revenue of Rs. 27,136 crores from its Tobacco division (56% of total revenue). In the same year, this segment contributed to profits of Rs. 8,694 crores (82% of total profits).[5] ITC Ltd sells 80 percent of the cigarettes in the India, where 275 million people use tobacco products and the total cigarette market is worth close to $6 billion (around Rs.35,000 crore) [31][32]

Its major cigarette brands include W.D. & H.O. Wills, Gold Flake Kings, Gold Flake Premium,Gold Flake Super Star, Navy Cut, Insignia, India Kings, Classic (Verve, Menthol, Menthol Rush, Regular, Citric Twist, Mild & Ultra Mild), 555, Silk Cut, Scissors, Capstan, Berkeley, Bristol, Lucky Strike, Players, Flake and Duke & Royal.[33][34]

Other businesses[edit]

  • Foods: ITC's major food brands include Kitchens of India; Aashirvaad, Mint-o, Sunfeast, Candyman, Bingo! and Yippee!.[35] ITC is India's largest seller of branded foods with sales of over Rs. 4,600 crore in 2012-13.[36] It is present across 4 categories in the Foods business namely Staples, Snack Foods, Ready-To-Eat Foods and Confectionery.[35]
  • Lifestyle Apparel: ITC sells its products under the Wills Lifestyle and John Players brands. Wills Lifestyle was accorded the ‘Superbrand’ status and John Players was included in the top 10 ‘Most Trusted Apparel Brands 2012’ by The Economic Times.[6]
  • Personal Care: Major brands include Fiama Di Wills, Vivel, Essenza Di Wills, Superia and Engage; and the products range across perfumes, haircare and skincare categories.[37][38]
  • Stationery: Brands including Classmate, PaperKraft and Colour Crew.[39] Launched in 2003, Classmate went on to become India's largest notebook brand in 2007.[40][41]
  • Safety Matches and Agarbattis: Ship,[42] i Kno and Aim brands of safety matches[43] and the Mangaldeep brand of agarbattis (Incense Sticks).[44]
  • Hotels: ITC's Hotels division (under brands including WelcomHotel) has evolved to become India's second largest hotel chain with over 90 hotels throughout India.[45] ITC is also the exclusive franchisee in India of two brands owned by Sheraton International Inc.- The Luxury Collection and Sheraton which ITC uses in association with its own brands in the luxury 5 star segment. Brands in the hospitality sector owned and operated by its subsidiaries include Fortune Park Hotels and WelcomHeritage Hotels.[45]
  • Paperboard: Products such as specialty paper, graphic and other paper are sold under the ITC brand by the ITC Paperboards and Specialty Papers Division.[46]
  • Packaging and Printing: ITC's Packaging and Printing division operates manufacturing facilities at Haridwar and Chennai and services domestic and export markets.[47]

Shareholding and listings[edit]

ITC's equity shares are listed on Bombay Stock Exchange, National Stock Exchange of India and Calcutta Stock Exchange.[49][50] The company's Global Depository Receipts (GDRs) are listed on the Luxembourg Stock Exchange.[51]

Shareholders (as on 31-March-2013) Shareholding[6]
Foreign companies (mainly British American Tobacco Company) 30.54%
Foreign Institutional Investors (FII) 19.68%
Banks, Financial Institutions, Insurance Companies and Mutual Funds 33.44%
Bodies Corporate 04.91%
Public and Others 11.13%
GDRs 00.30%
Total 100.00%

Employees[edit]

As per the Annual report of the company, it had 25,960 employees as on 31 March 2013,[6] out of which 3,043 were women.[12] It spent Rs. 2,145 crores on Employee benefits during the FY 2012-13.[5] During the same year, its attrition rate was 12%.[12]
Its Chairman Y C Deveshwar has won renowned awards and recognitions including Padma Bhushan from Govt. of India[6][52][53] and 7th best performing CEO in the world by Harvard Business Review.[54]
Meera Shankar, Indian ambassador to USA between 2009 and 2011, joined the board of ITC Limited as the first woman director in its history.[55] She is an additional non-executive director of the company.[56]

Initiatives[edit]

ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the India's biggest foreign exchange earners (US $5.4 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach.[57]

The company places computers with Internet access in rural farming villages; the e-Choupals serve as both a social gathering place for exchange of information (choupal means gathering place in Hindi) and an e-commerce hub. What began as an effort to re-engineer the procurement process for soy, tobacco, wheat, shrimp, and other cropping systems in rural India has also created a highly profitable distribution and product design channel for the company—an e-commerce platform that is also a low-cost fulfillment system focused on the needs of rural India. The e-Choupal system has also catalyzed rural transformation that is helping to alleviate rural isolation, create more transparency for farmers, and improve their productivity and incomes.[citation needed]

ITC e-choupal creatively leverages information technology to set up a meta-market in favour of India's small and poor farmers, who would otherwise continue to operate and transact in 'un-evolved' markets.

As of July 2010, services through 6500 Echoupal across 10 states, reach more than 4 million farmers in about 40,000 villages. Free access to Internet is also opening windows of rural India to the world at large.

ITC e-choupal is now being regarded as a reliable delivery mechanism for resource development initiatives. Its potential is being tested through pilot projects in healthcare, educational services, water management and cattle health management with the help of several service providers including non-governmental organizations. In 2008, this initiative was recognised in the list of "Innovations to make markets more inclusive for the poor" in World Development Report Sep-2008 by World Bank.[58]

  • Philanthropy:

Classmate notebooks were launched with the initiative of contributing 1 rupee towards the education of poor children,from every four notebooks it sold.

Classmate, has launched a programme called Classmate Ideas for India challenge. The programme would be a part of the company's centenary initiative. [59] The nation-wide programme would invite ideas of the youth, who have the potential to transform India. Classmate Ideas for India challenge plans to reach out to 25 lakh students across 30 cities, 500 schools and 200 colleges across the country.[60]

  • ITC Sangeet Research Academy: It is a Hindustani classical music academy established in 1977 and located in Kolkata.[61] Some noted musicians are associated with this academy.[62]

Criticism[edit]

Awards and recognitions[edit]

  • In 1994 and 1995, the ILTD Division in Chirala and Anaparti won the "Best of all" Rajiv Gandhi National Quality Award[63]
  • ITC features on the Forbes Global 2000 rankings for 2012 at position 841.[7] In the same rankings, the company's market value placed it as the 184th largest company in the world.[7] Forbes has also included the company in Asia's Fab 50 Companies list.[64]
  • In 2013, ITC was ranked the third most admired company in India by Fortune.[65]
  • In 2011, all of ITC’s super premium luxury hotels were accorded LEED Platinum certification, making ITC Hotels the ‘Greenest Luxury Hotel Chain in the World’.[66][67]
  • In 2010, ITC was ranked 6th amongst global consumer goods companies in sustainable value creation during 2005-09, by Boston Consulting Group.[68]
  • It received the National Award for Excellence in Corporate Governance from the Institute of Company Secretaries of India in 2007.[1][69]
  • In 2006, ITC's e-Choupal program won the Stockholm Challenge Award 2006 in the Economic Development category. This program enables over 3.5 million farmers to access crop-specific and customised information in their native village habitat and language.[70][71]

See also[edit]

References[edit]

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  2. ^ a b c d e f "History and Evolution". ITC Limited. Retrieved 14 September 2013. 
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  62. ^ "Visiting Researchers". itcsra.org. Retrieved 21 September 2013. 
  63. ^ SHRAWAN (2013-05-29). "ANNEX IV: LIST OF AWARD WINNERS OF RAJIV GANDHI NATIONAL QUALITY AWARDS". http://www.bis.org.in. New Delhi: Bureau of Indian Standards. Retrieved 2014-05-15. 
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  65. ^ "TCS replaces Tata Steel as India's most admired company". Times of India. 9 July 2013. Retrieved 14 September 2013. 
  66. ^ "ITC secures LEED platinum rating for all its luxury hotels". Economic Times. 19 July 2011. Retrieved 15 September 2013. 
  67. ^ "ITC Hotels rated as 'greenest luxury hotel chain in the world'". Deccan Herald. 19 July 2011. Retrieved 15 September 2013. 
  68. ^ "ITC is world’s 6th largest value creator: BCG report". Financial Express. 22 September 2010. Retrieved 15 September 2013. 
  69. ^ "Major Awards Over the Years". ITC Limited. 17 May 2013. Retrieved 14 September 2013. 
  70. ^ "ITC e-Choupal wins Stockholm Challenge Award". The Hindu. 13 May 2006. Retrieved 15 September 2013. 
  71. ^ "...And ITC’s e-Choupal gets Stockholm Award". Indian Express. 13 May 2006. Retrieved 15 September 2013. 

External links[edit]