The Hindu : ITC Foods looking for foreign partners

Online edition of India's National Newspaper
Friday, Dec 26, 2003

Business

Business

ITC Foods looking for foreign partners

By Shanthi Kannan

CHENNAI DEC. 25. ITC Foods, a division of ITC Limited, is scouting for international companies for a unique technical know-how tie-up to improve the quality of its products. The division, which has made a foray into products such as wheat flour, ready-to-eat staples, biscuits and confectionaries, need technical facilities to beef up the quality of food. The technological help, it is stated, can also go a long way in introducing various innovative food items.

The company is also planning to introduce assorted varieties of biscuits and candies in the coming months, said Ravi Naware, Divisional Chief Executive (Foods Division), ITC Limited.

Quizzed on the manufacturing facilities for making these products, Mr. Naware said the company was at present outsourcing its products from `third party' contractors. It had 14 locations across the country from where these products were manufactured for ITC. These products were later branded and marketed by ITC. As the company acquired market share in the foods segment, it would set up its own facilities, he added.

It may be recalled that ITC sold its agro foods division to an Amercian company a couple of years ago. Questioned why it was making a re-entry now, Mr. Naware said one of the two key drivers that enabled ITC to enter foods business was that it, over a period, acquired internal competencies through its hotels and restaurant businesses. It had established a relationship with farmers to buy raw materials such as wheat to name a few. He said the company had developed a key insight and ability for mass manufacturing. Second, ITC had always been cash rich. So, the company decided to enter into branded food products. The retail food market in the country was huge and placed at several thousand crores. Only 5-6 per cent of the market was packed and branded and the balance unbranded. The packed branded segment was growing, he said. The company was at present exporting small consignments of products under the Kitchen of India brand, he added. It was also working on rapidly increasing its presence in the market both by rolling out its products nationally and adding to its ladder of products, he pointed out.

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