Cigarette-cum-food maker ITC Ltd is pouring an additional Rs470 crore to beef up facilities at its Uttaranchal factory so it can use it to expand manufacturing for the northern Indian market.
The company may manufacture food items and other goods in its new lines of business, sources said without giving details. This pushes the total investments of the company in Uttaranchal to Rs600 crore. Currently it has a Rs60 crore unit that makes paper cartons and films, and a biscuit manufacturing unit on which it has spent Rs 70 crore.
The additional fund will help build infrastructure such as civil construction, boilers and air conditioning which will be a common for future ventures in the state. Products from the both the existing units in Uttaranchal are expected to roll out this month.
“A total of Rs600 crore investments will be made, keeping in mind the fact that Uttaranchal is an excise free zone as well as it is conveniently located for proximity to the northern Indian market,’’ R. Srinivasan, member, Corporate Management Committee, ITC told Mint. “The company has a strong presence in the south. Uttaranchal is a good point for servicing our northern customers.”
He said that most of the user industries for the paper boards and flexibles packaging such as branded fast moving consumer goods were setting up shop in the state.
Uttaranchal, in the last couple of years has seen a slew of investments from FMCG companies which produce branded products in the pharma, biotech and personal care sectors.
ITC, which sells the Wills brand of cigarettes and operates luxury hotels in the country, also makes the Sunfeast range of cookies and biscuits. It’s newer lines of business have included spices and ground wheat and ready meals that it sells under the Aashirvaad brand. It’s paper and packaging unit makes flexible packaging and runs the country’s only chlorine-free paper mill.
Separately, Srinivasan said the company will soon be scouting for acquisitions for the packaging business. The company is currently engaged in research for swuitable acquisitions before it starts to approaching prospective firms. “The time frame and budget are flexible and cannot be spelt out at this point of time,” said Srinivasan.