ITC is recognised as one of the most successful private sector companies in India. It is also a caring company which is instrumental in creating and sustaining the livelihoods of nearly five million people in India.
In a concerted effort to develop innovative value-chains across its diverse business segments, ranging from consumer goods to hospitality and commodity trading, ITC is instrumental in creating and sustaining the livelihoods of nearly five million people, many of whom represent the weakest sections in rural India.
"We believe that an effective growth strategy for India must address the needs of rural India, home to over 300 million people who live in poverty," says R. Srinivasan, Chief Executive Officer of ITC's Paper and Packaging Division. "It is imperative to ensure that India's economic growth is inclusive, embracing its villages, so as to free millions of its disadvantaged citizens from the indignity of poverty."
Echoing the words of India's Finance Minister P. Chidambaram, mr Srinivasan is confident about his nation's surging economy, which is currently growing at more than 9% annually, but warns, Òthe growth will not last if the gains are not shared by hundreds of millions of Indians still mired in isolated, poverty-stricken villages."
Empowering rural families
As part of its business strategy of creating multiple drivers of growth and sustainability, ITC pioneered and established the world's largest rural digital infrastructure, eChoupal, empowering over five million rural families.
The system leverages information technology to farmers in 31,000 villages in India. Mr Srinivasan explains, "Basically, ITC has supplied a computer kiosk to each village so that they can access up-to-date information such as sowing seed times, herbicides and accurate weather reports which, in turn, help them to improve their crops as well as the process of bringing it to the market. Previously, farmers did not have access to such quality inputs and as a result lost 60-70% of the potential value of their crops. Similarly, on the output side, middlemen clogged the supply chain, reducing profit margins for both farmers and buyers such as ITC."
The system has led to considerable recognition both nationally and internationally, with ITC becoming the first Indian company to win the prestigious Development Gateway Award. More recently, mr Y C Deveshwar, the chairman of ITC, was given the Sustainability Leadership Award in Zurich for Òhis extraordinary leadership in developing, implementing and promoting sustainability in ITC through innovative corporate strategies that led to significant societal development."
Leading sustainability practices
In addition to its eChoupal system, ITC has spearheaded one of the largest industry-facilitated afforestation programmes globally, greening 75,000 hectares of land. Also, the company's integrated watershed development project has irrigated over 28,000 hectares of land, making it the most significant corporate intervention in watershed development in rural India. ITC's forestry and watershed initiatives make it the only company in the country to be both 'carbon' and 'water' positive - a testimony to its benchmark sustainability practices.
"We try to manage our work in a sustainable and effective way," says mr Srinivasan, adding: "Another good example of our sustainability approach is the marketing of our incense sticks (agarbattis) which are sourced from small-scale cottage units.
"With its participation in this business, ITC aims to enhance the competitiveness of the small- and medium-scale sectors through its complementary R&D-based product development and strengths in trade marketing and distribution. At the same time, our Incense Business Unit is helping to support over 5,000 rural women who make the agarbattis by hand. The income they receive goes towards their children's education and health, thus bringing positive societal change while delivering value to the consumer," explains mr Srinivasan.
International standards
Mr Srinivasan says that the implementation of international standards is an important mechanism to achieve sustainable growth. He points out that ITC's Incense Business Unit is encouraging the use of standards in the small-scale "cottage industries" from which it sources the incense sticks. "In the past two years, six vendors out of nine have been certified to the Quality Management system standard ISO 9001. This initiative has helped in standardising the systems and procedures across the vendors and helped them to follow best practices," he says.
He continues, "As for ITC, we have adopted DNV's IQRS™ (International Quality Rating System) as a tool to benchmark our process and business excellence practices and our division at Chennai has recently achieved a Level 8 in the rating process."
ITC's Incense Business Unit has encouraged the production of incense sticks as an attractive micro enterprise because of its marketability says mr Srinivasan. "We have developed an innovative model with a win-win situation for both the producers and consumers. This is called "ASHA" which is an abbreviation for Assistance in Social Habilitation through Agarbatti."
Country before corporation
"The success already achieved shows it has a clear potential to grow into a thriving business. For example, in the Munger district of Bihar, ITC provides training and marketing support at six centres with more than 350 members who are gainfully employed. Production has already reached 10 tons of incense sticks per month. For unemployed female members this provides a critical supplementary income," says mr Srinivasan.
In spite of ITC's commendable efforts, mr Srinivasan acknowledges that he has his concerns, particularly about events that are well outside his control. "I am confident about India's future but at the same time what we're doing at ITC is only a drop in the ocean. There is so much more that could be done for many more people.
The nation's 9% annual growth rate is completely meaningless to people living
in the poverty-stricken villages. An effective growth strategy for India must also address the needs of rural India."
PHOTO: ITC