ITC Foods is weighing plans to set up a third plant, in Bangalore. While details of investment and product lines are yet to be frozen.
KOLKATA: ITC Foods is weighing plans to set up a third plant, in Bangalore. While details of investment and product lines are yet to be frozen, it could be for a mix of food and non-food items, Ravi Naware, chief executive officer, ITC Foods said on Tuesday.
The company is also devising a two-pronged strategy for growth. As far as acquisitions go, the company will explore options in product lines it has not entered and would try to get a head start.
This was a strategy it adopted for Mint-O, which today, according to the company, is the No.1 lozenge in the country.
It might also consider acquiring a second brand in a product line it is already present in, to access a set of consumers the original brand is not able to reach.
“Say, we have a premium brand… We will acquire a mass brand in the same product category without lowering the premium aspects of the existing brand,” said Ravi Naware, chief executive officer, ITC Foods.
“We have not set a price band on the acquisition, but whatever we buy will have to make economic sense… And open up avenues of growth not possible through the current portfolio of products,” he added.
Details of investment and product lines have not yet been frozen for the Bangalore plant, but these could be a combination of both food and non-food items, indicated Naware.
ITC Foods started setting up its own facilities about one-and-a-half years ago. Prior to this, it operated mainly through contract manufacturers. The composite facility at Haridwar in Uttarakhand, set up at a cost of Rs 700 crore, manufactures the Bingo range of potato chips, Sunfeast biscuits as well as the recently launched shampoos range.
The Pune plant, being set up with an investment of Rs 200 crore, will mainly manufacture food products.
Within its existing portfolio of products, the company is looking to expand the variants in each brand. Masala mixes could be a possibility.
Though exports form a mere 2-3% of its turnover, ITC Foods is looking to increase its share with a product mix of Kitchens of India, Sunfeast biscuits and atta. The exports market is growing at 40-50% per annum, albeit on a shallow base.
The major thrust of exports, however, will be on Kitchens of India, through which the company is consciously attempting to build a brand of high quality Indian food in the mainstream western market. The company is deliberately trying not to target the diaspora, which tends to shop from Indian stores, where price competition works.
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