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How YC Deveshwar transformed ITC from tobacco maker to FMCG giant; tracing 2 decades of his life as chairman

FE Online

Fast moving consumer goods (FMCG) giant ITC’s longest-serving chairman Y C Deveshwar, who passed away on Saturday following a brief illness, was also the man to help ITC shake off the shackles of being largely a cigarette manufacturing company. Ever since he took over as the company’s chairman (in January 1996), Y C Deveshwar was in the throes of catapulting ITC into an FMCG behemoth and take on competitors ranging from Unilever, P&G, Nestle, Parle Agro etc.

The Transformer

During ITC’s annual general meeting (AGM) in 2016, Y C Deveshwar called the challenges that the company faced around his appointment as chairman as “trying circumstances and a far cry” even as the journey of turnaround “since then has been purposeful.”

ITC was glaring at formidable challenges that had threatened the foundation of its future, its earlier diversification forays had either faltered or failed while a battle for company’s control had emerged amid a public smear campaign. Its shareholders and board members were divided on the future direction, Y C Deveshwar had said during his speech at 2016 AGM.

Overall, the problem at hand for the chairman was to restructure and reposition the company for extreme competitiveness amid the globalising Indian market.

YC Deveshwar led that change as ITC exited businesses that were not “well positioned to create long-term value,” he said. This happened along with leveraging internal competencies and formulating a fresh portfolio of businesses by “creating multiple drivers of growth.”

Moreover, under his chairmanship, ITC was able to stave off the takeover threat from its shareholder British American Tobacco that wanted a 51 per cent controlling stake.

YC Deveshwar had also served as the chairman and managing director of the national carrier Air India from 1991 till 1994, as per the information available on the company s website, that gave Air India a “new direction,” former Air India executive director Jitender Bhargava said in a tweet on Saturday.

“AI made its highest profit of Rs 333 Cr – almost one crore a day, during his (Y C Deveshwar) tenure,” said Bhargava.

YC Deveshwar made a strong contribution to Indian industry, tweeted PM Modi. “His efforts helped ITC become a professionally-run Indian company with a global footprint.”

Recognition and Scale

ITC grew from Rs 5,115 crore in gross revenue in 1996 when he took over as chairman to Rs 55,000 in 2017 — the year when he stepped down from the executive role. That’s because of the diversification that ITC undertook under YC Deveshwar’s regime across FMCG, paperboards & paper, packaging, hotels, agri etc.

ITC’s non-cigarette segments accounted for 58 per cent of its net segment revenue, having grown 18-fold since 1996, YC Deveshwar said during his speech at ITC’s 2017 AGM. Also, its market cap grew nearly Rs 4 lakh crores — over 72 times since 1996, he said.

Moreover, YC Deveshwar led ITC to remain among India’s top 3 corporates in the private sector with respect to their contribution to the exchequer. Between 2012-2017, ITC contributed nearly Rs 1.4 lakh crores.

YC Deveshwar focus on sustainable and inclusive growth and the transformative role businesses in creating larger societal value “drove ITC to pursue business models that today supports over 6 million livelihoods,” ITC Managing Director Sanjiv Puri said in a statement on Saturday.

YC Deveshwar was the recipient of the Padma Bhushan India s highest civilian award in 2011. He was an alumnus of the Indian Institute of Technology, Delhi and Harvard Business School. He was also ranked as the world s 7th Best Performing CEO by the Harvard Business Review in January-February 2013 edition.

YC Deveshwar was also the recipient of the Global Leadership Award by the US-India Business Council of the US Chamber of Commerce in 2010 and Business Person of the Year Award 2006 by the UK Trade & Investment. He was born on February 4, 1947 in Lahore.