Diversified business group ITC may be gearing up to invest up to Rs 1,000

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crore in the FMCG segment over the next four years. The investment will be towards setting up new facilities and enhancing existing capacities.

According to UBS Investment Research, which had met the company’s top management recently, ITC is planning to invest Rs 600 crore to Rs 1,000 crore over the next four years.

The Kolkata-based company did not confirm the figure but said it will invest in building state-of-the-art manufacturing facilities and logistics as well as ramping up existing capacity.

“Given the rapid growth of the fast moving consumer goods segment in India, which is expected to triple in size in the next 10 years, ITC is pursuing an aggressive investment led growth strategy,” said Kurush Grant, executive director, ITC.

Without confirming how much the company plans to invest, Grant said ITC is investing heavily in technology and manufacturing, fixed assets, brand building, research & development, product development and consumer insights to build market standing. “We will invest in building state-of-the-art manufacturing facilities and logistics as well as ramping up existing capacity,” he added.

The UBS Investment Research report, however, said, “(ITC’s) losses in other FMCG are coming down, but they (ITC management) warn that the new food businesses will involve higher investments; Rs 600 crore to Rs 1,000 crore over the next 3-4 years.”

ITC’s FMCG division sells branded packaged foods under Bingo, Sunfeast and Yippee brands among others, personal care range such as Vivel and Fiama di Wills, apart from stationery products, cigarettes and lifestyle

apparel.

Over the past few years, the company has rapidly scaled up its FMCG businesses and has entered new categories like instant noodles, pasta, biscuits among others.

In the quarter ended December 31, 2011, its FMCG business registered a revenue of Rs 4,603.66 crore, witnessing a growth of 19 per cent over the previous fiscal.

“This expansion of the FMCG portfolio not only requires establishment of new manufacturing operations but also creation of efficient supply chain, enhancement of logistics infrastructure and efficient multiple distribution channels across multiple locations,” Grant said.