Decade post ITC-split, Agro Tech has become a debt-free unit. 4Ps B&M reveals how it has also customised rules and has become the next-gen FMCG giant
The first thing you notice while strolling
down Devi Road (a busy road in Hyderabad) is the famous twin ‘neighbouring’ towers. One of them houses the known conglomerate ITC, while the second belongs to a lesser known agro-food company – Agro Tech Foods Ltd. Today, they share nothing in common on balance sheets; however a decade back, they did share everything in common, for then, ITC owned Agro Tech! When Deveshwar sat on ITC’s throne in 1996, he decided to dilute his interests in Agro Tech, fearing loss of attention to his three key revenue earners – tobacco, hospitality & paper units. The dilution happened the following year in a ‘total’ fashion. ITC sold its stake in Agro Tech finding a willing suitor in US-based ConAgra Foods which had already established itself in 35 countries and was also looking at India. Agro Tech, with its two well established brands Sundrop & Rath fitted the bill perfectly!
Of the few cases where the acquired entity has benefited from the transaction, Agro Tech sets a classic example of how an acquired entity can sparkle. And the success story began when Agro Tech diversified from edible oils to other food segments in the ConAgra mode as Utpal Gupta, President, Agro Tech Foods Ltd. reminisces, “ITC’s focus was only on edible oil and Sundrop was a well known name so we didn’t want to disturb the production of Sundrop. On the other hand, ConAgra’s focus was larger, and it had ventured into other businesses as well. So this suited our growth plans.”
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
The first thing you notice while strolling
down Devi Road (a busy road in Hyderabad) is the famous twin ‘neighbouring’ towers. One of them houses the known conglomerate ITC, while the second belongs to a lesser known agro-food company – Agro Tech Foods Ltd. Today, they share nothing in common on balance sheets; however a decade back, they did share everything in common, for then, ITC owned Agro Tech! When Deveshwar sat on ITC’s throne in 1996, he decided to dilute his interests in Agro Tech, fearing loss of attention to his three key revenue earners – tobacco, hospitality & paper units. The dilution happened the following year in a ‘total’ fashion. ITC sold its stake in Agro Tech finding a willing suitor in US-based ConAgra Foods which had already established itself in 35 countries and was also looking at India. Agro Tech, with its two well established brands Sundrop & Rath fitted the bill perfectly!Of the few cases where the acquired entity has benefited from the transaction, Agro Tech sets a classic example of how an acquired entity can sparkle. And the success story began when Agro Tech diversified from edible oils to other food segments in the ConAgra mode as Utpal Gupta, President, Agro Tech Foods Ltd. reminisces, “ITC’s focus was only on edible oil and Sundrop was a well known name so we didn’t want to disturb the production of Sundrop. On the other hand, ConAgra’s focus was larger, and it had ventured into other businesses as well. So this suited our growth plans.”
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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