Packaging major Rollatainers has formulated an expansion strategy, aimed at doubling the combined turnover of the packaging business of Rollatainers and ITC to Rs 10 bn in the next five years.
ITC Limited (FY99 turnover: Rs 76 bn) recently bought a majority stake in the company for a consideration of Rs 250 m, with the aim of becoming one of the largest paper packaging companies in the entire middle east Asia. ITC has interests in tobacco/ cigarettes, hotels, paper and packaging. It is also one of India's largest foreign exchange earners (FY99 Forex inflow: Rs 6.5 bn). ITC has a presence in the paper/packaging segment through ITC-Bhadrachalam Paperboards.
Rollatainers plans to use ITC's financial muscle to market its products in the overseas market. In particular, it is focusing on expanding its liquid food packaging business, which the company believes, has great potential. The company will make use of ITC's resources to upgrade and export technology and set up manufacturing facilities for sophisticated packaging formats. ITC, on the other hand, will benefit from Rollatainers understanding of the packaging intricacies and the goodwill it enjoys in the market. This combining of ideas and resources is aimed at increasing the company's high-end product portfolio and hence, improving returns on investment.
With the economy picking up and the paper segment showing signs of recovery, the move is timely and will provide a major boost to ITC's strategy of becoming as a major player in the packaging industry.
ITC Ltd has announced third quarter results of the financial year 2016-2017 (3QFY17). The company has reported 4.7% YoY and 5.7% YoY growth in revenues and net profits respectively. Here is our analysis of the results.
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