Is ITCs succession

plan gaining speed?

Industry

Conglomerate

Predecessor

W.D. & H.O. Wills

Founded

August 24, 1910

(as Imperial Tobacco Company
of India)

Headquarters

Kolkata, West Bengal, India

Key people

Y C Deveshwar, (Chairman)

Products

Tobacco, hotels, paperboards &

specialty
papers,packaging, agribusiness, packaged
foods &confectionery, IT,
branded apparels, personal
care, stationery, safety
matches and
other FMCG products

Deveshwar as a chair In 1996, when person

Deveshwar took over, he
inherited twonon-tobacco businessesfrom his
predecessors: hotels and paper board.
Thereafter, the "general" battled to create new
drivers for growth: non-cigarette fast-moving
goods and information technology.
And

his tenure ends in 2012.

During

this,in 2010 three new members,

Kurush Grant, Nakul Anand and Pradeep
Dhobale, were inducted on the board.

Succession plan
timeline
By
2017
2012

2011

2010

ITC
decides
to reappoint
ITC plans Devesh
to start war as
its
chairsuccessi person.
on
planning.

Its time that

Deveshwar
Deveshwar finally retires
is refrom ITC and
appointed a new chairas chairperson is
person for appointed.
next five
years.

The strategic move2011

Re-appointment of Deveshwar as
chair-person

At that time, the challenge

was to transform ITC into an
FMCG company.

 In

2015, it is the over 100-year-old

cigarettes business, the main profit
driver for ITC, that is enmeshed in
problems. The sharp rise in excise and
VAT duty over the past three years has
impacted volumes, and the spectre of
further regulatory tightening, including
a ban on loose cigarettes, in the
Budget on February 28, hangs heavy
over its Nehru Road, Kolkata,
headquarters.

Further strategies adopted by Deveshwar

With thecigarettes businessin the slow lane, the

relatively new non-cigarette FMCG arm is gaining
importance.

To spur growth, ITC inked an agreement to acquire two

high-recall brands, Savlon and Shower to Shower, from
Johnson & Johnson recently. The deal, estimated at
between Rs 180 and Rs 200 crore, marks ITC's presence
in the personal hygiene space. This is the second
acquisition by the company in 10 months after the
buyout of B Natural juice for Rs.100 crore.

With a strategy based on acquisitions and organic

growth, ITC's plan is to take the non-cigarette FMCG
business to Rs 1,00,000 crore over the next 15 years
from Rs 8,100 crore in 2013-14.

The main challenge for ITC in achieving

these targets, however, lies elsewhere
that is if the is company ready with the
next rung of leaders to drive growth?

 ITC

had begun to plan its future well ahead

of Deveshwar's reappointment in 2011. Of
the new board members appointed between
March 2010 and January 2011, Grant was
given the responsibility for overseeing the
FMCG business, Dhobale was made the head
of paperboards, paper, packaging, finance
and IT, and Anand was entrusted with
hospitality, travel and tourism at the
strategy level. Much of ITC's succession
planning, however, remained out of public
view. It gained traction towards the end of
2014, when Grant and Dhobale's roles were
swapped, while Anand was given additional

 It

is widely believed that Grant or Dhobale or Anand will

succeed Deveshwar. But, ITC has been extremely tight-lipped
about the future.

For

one, Deveshwar's current term will end only in 2017, which

means there is still a window of two years and things could go
any which way.

All three of them -Grant, Dhobale and Anand- are in their late
fifties.

ITC

is busy creating a second line of leaders to take care of its

Creating new roles-

 Last

year, alongside the reshuffle in portfolios of

executive directors, ITC also made some other key
changes.

Sanjiv

Puri, who was earlier handling the India

Tobacco Division, was made president of the FMCG
businesses. That meant representation of the FMCG
business at the corporate management level which
is responsible for strategic supervision.

Among

other changes, B Sumant moved in as

divisional chief executive of India Tobacco Division;
Ranvir Bhandari assumed the role of vice-president
(operations) of the hotels business and V L Rajesh

 Each

of these segments has a chief executive

and many of these roles were created to suit
the changing nature of ITC's business. For
instance, Sumant who moved to the India
Tobacco Division will pay special attention to
marketing and distribution, the key link to ITC's
growth plans.

Experts

say the success of ITC's investment of

Rs 25,000 crore over the next five years will
depend on the strength of its distribution
network.

 While

ITC has underplayed these changes, saying the

reshuffle is an ongoing process, the churn inside the
company over the past few years has been
conspicuous.

Among

the not-so recent changes, but key to ITC's

growth, are those of S Sivakumar, divisional chief
executive of the farm business, and Sandeep Kaul,
who was made chief executive of personal care
products segment.

Sivakumar

has been responsible for spearheading

ITC's celebrated e-choupal model and Kaul is
responsible for the development and launch of one of

As

the company expands its non-cigarette

FMCG business, the challenges for its
leadership are also growing. So is the secondin-command ready to take up the challenge?
When the ITC board cleared Deveshwar's
extension as chairman, the resolution also said
that he could, during his tenure, become a
non-executive chairman to pave the way for
succession planning. Whether that is likely
during his current tenure, or after 2017, is
something ITC's Nominations Committee must