ITC expects agri unit to post 20% growth

Monday, August 15, 2005

ITC Ltd expects its agri businesses division to see a 20 per cent growth in 2005-06. According to S Sivakumar, CEO, the division’s turnover stood at Rs 2,000 crore last fiscal. Story found here.

The company’s supply chain project e-choupal will move into the second phase, which will focus on horticulture, once the first phase, which deals with sourcing of grains, reaches saturation.

At present, under e-choupal the company sources bulk commodities such as wheat, soyoil, maize and tobacco from Uttar Pradesh, Madhya Pradesh, Rajasthan, Maharashtra, Karnataka and Andhra Pradesh.

“Once the sourcing of grains reaches a saturation point, we may try pilot projects for horticulture projects. This will be the second phase of ITC’s e-choupal network and is likely to come up in 2006,” Sivakumar said.

The contract farming segment, which earned Rs 25-30 crore in revenues, is expected to grow at 60-70 per cent. “For this segment, we have realised that it is better to go for high-value export-oriented special commodities such as fruits or flowers rather than grains, as farmers already know everything about them and don’t need our expertise,” Sivakumar said.

As for investment in the segment, he said, it is very minimal and nothing specific. “As we are able to use our existing network, no specific investment is required.”

ITC’s agri division has three sets of businesses under its umbrella. First is the sourcing of bulk commodities the company needs for its branded goods business such as tobacco, wheat, sugar and vegetable oil.

Second, is trading, international and domestic, including value addition. And third, is the e-choupal network, which is spread across six states.

Source: Business Standard