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ITC benefits from growth in FMCG business

KOLKATA: A 50 per cent growth in new FMCG (fast moving consumer goods) businesses like foods, lifestyle retailing as well as income from hotels and paper businesses helped ITC mitigate the muted growth of its main business segment, cigarettes, during the third quarter of 2007-08 when it clocked a 11 per cent growth in its net turnover which rose to Rs. 3,458 crore.

The ITC board, which met in New Delhi on Friday, took on record the results which showed a 15.5 per cent growth in pre-tax profit and an almost similar rate of growth in post-tax profit which stood at Rs. 831 crore during the October-December 2007 period, a company release said. Branded packaged foods grew by 60 per cent over last year with all six brands doing well. Lifestyle business posted a 26 per cent growth. In the personalcare segment, the company launched new products.

In the hotels segment, even as construction activity with respect to the Bangalore and the Chennai property was progressing according to plans, revenues improved. Paperboards, speciality paper and packaging businesses improved by 11 per cent. However, agri-business registered a drop primarily due to restrictions on export of non-basmati rice. But record exports of leaf tobacco brought good profits. The company also successfully renegotiated pricing of its export orders to offset the impact of the appreciating rupee. The pilot project on fresh fruit and vegetables is progressing and three ‘choupal fresh cash and carry’ stores and six fresh retail stores are in operation.

The taxation issues in the cigarette business continued to cause concern. The additional burden of indirect taxes during the quarter aggregated Rs. 513 crore. ITC felt that restrictive measures in this segment should be preceded by the creation of alternative sources of income for the 35 million people who were dependent on the industry and who might be affected by the measures.

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