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ITC's non-tobacco drive to lift topline by Rs 20 billion

BS Bureau

City-based ITC's hotel business expansion and diversification into lifestyle retailing and greeting cards are estimated to add Rs 20 billion to the topline by 2006, according to company officials.

Two new major hotels -- Grand Towers in Bombay and Sonar Bangla in Calcutta -- are likely to be followed by a premium property in Madras, where an eight-acre plot has been acquired.

The chain of Wills Sport stores will be another high point in the investment plan and is expected to contribute to the topline surge. The new stores will come up rapidly, with one store or more being added every week till the network of 50 is reached.

The first store will come up on Park Street in Calcutta by end-August or early-September. The product range and ambience at the stores have been designed by San Francisco-based American Design Intelligence Group, ITC sources said.

The growth will be backed by investments, which will show a definite shift from the trend so far followed by the company. ITC had invested Rs 18 billion in the past five years, but, while past investment has been heavily biased towards the cigarette business, the proposed Rs 25 billion investment in the next five years will be dominated by investments in non-tobacco businesses.

A focus on the rural sector will be another feature of ITC's investment plan. Not all the investments would be in the urban sector, in view of the need to build on strengths in the rural sector.

For example, a crucial aspect of ITC's e-initiative under its e-choupal banner has been the chain of Internet kiosks set up in the countryside to be the FMCG transaction backbone for other products aimed at the rural population.

In fact, a pilot project to sell LPG cylinders using the network has been initiated. Already 235 e-choupal kiosks covering 1,000 villages and 120,000 farmers have been set up. By 2003, ITC would set up 3,000 kiosks covering 1.5 million farmers.

The network would help company and farmer alike. ITC's agri-products business division has emerged as the first-choice supplier of customers like Coca-Cola, Abudhabi Feed Mill and Mitsubishi, who source agriculture commodities and food products from India.

Thanks to the customer relationship management, the company has very high reputation for quality, reliability and value added services. The website for this business, www.itcibd.com, was focussed on customer care in the commodity trading business. Customers can access information on crop production and forecasts, market updates, the latest shipment positions and the prevailing foreign exchange rates.

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