YC Deveshwar, the man who transformed ITC into a multi-business conglomerate, passes away
YCD, as he was popularly referred to in corporate circles, had joined the board of ITC Ltd in 1984.
YCD, as he was popularly referred to in corporate circles, had joined the board of ITC Ltd in 1984 in just sixteen years after he joined the company from Indian Institute of Technology, Delhi. He was subsequently appointed the chief executive and chairman in 1996.
Along the way, Deveshwar was instrumental in transforming the Kolkata-based company from being mostly a cigarette maker to a conglomerate with interests in sectors such as fast-moving consumer goods, hotels, paper and packaging and agri-business. As of March 2018, ITC’s gross sales value expanded to Rs 67,081 crore. It posted a net profit of Rs 11,223 crore. ITC will declare its FY19 financial result on Monday.
Prime minister Narendra Modi tweeted: “Shri YC Deveshwar made a strong contribution to Indian industry. His efforts helped ITC become a professionally-run Indian company with a global footprint. Saddened by his demise. My thoughts are with his family, friends and the ITC group in this hour of grief.”
ITC was engaged in non-tobacco businesses even before Deveshwar took charge, given the disfavour with which cigarettes are viewed by political establishments, health activists and the general public.
But the strong impetus that this part of the business got under Deveshwar has made ITC synonymous also with luxury hotels, agri-business, paper and paperboards, branded apparel and lifestyle retail, agarbattis, packaged foods, and personal care. It is now a multi-product, hugely diverse conglomerate, and tobacco is just a part of it.
Deveshwar was among the first CEOs to tap India’s vast countryside, by way of his unique e-Choupal concept — linking directly with farmers via the Internet for procurement of products — and by entering the FMCG space in rural areas. The going has been tough and the results mixed, although the company takes a long-term view on this.
In fact, dealing with tough situations has been part of Deveshwar’s mental makeup, such as when he took a break from ITC to run Air India in 1991-94 and then on his return to ITC, when he became vice-chairman before taking the top job two years later. These were turbulent times at the company with the largest shareholder, British American Tobacco, at loggerheads with the management led by Deveshwar’s predecessor KL Chugh. The company also had to deal with allegations that it violated the Foreign Exchange Regulation Act.
Deveshwar was able to pull around. Having been something of a wunderkind — he was spotted early by ITC’s legendary chairman AN Haksar and became a board member at 37 — Deveshwar also gained valuable experience of how the government works during his stint at Air India.
With ailing health and to pass-on the baton to younger executives whom he can groom and mentor to take full charge of a complex multi-faceted organisation, Deveshwar retired from the executive role of CEO at ITC in February 2017 and was appointed by the board as non-executive chairman till 2022. ITC in 2017 appointed Sanjiv Puri at the helm for day-to-day affairs and who continues to be the managing director.
Though Deveshwar shifted to New Delhi for over a year for his treatment, he continued to keep a close watch on ITC and its entire senior management would conduct meetings at Delhi. In fact, the last few board meetings of ITC too were held in Delhi.
In his condolence message, Puri said Deveshwar had passionately championed the cause for sustainable and inclusive growth and the transformative role businesses could play in creating larger societal value.
"Inspired by a patriotic fervour, manifest in his clarion call of ‘Lets Put India First’, he led ITC's strategic thrust to create an exemplary Indian enterprise dedicated to serving national priorities," said Puri.
Puri said Deveshwar’s leadership transformed ITC into a valuable and admired multi business conglomerate with a robust portfolio of front-ranking businesses in FMCG, hotels, paperboards and paper, packaging and agri-business. “His Vision to make societal value creation a bedrock of corporate strategy also led ITC to become a global exemplar in sustainability and the only company in the world to be carbon positive, water positive and solid waste positive for over a decade," said Puri.
While ITC has retained its lead in the tobacco business accounting for two out of three legal cigarettes sold in the country, the company has a wide spectrum of bestsellers in non-tobacco segments as well. It has created more than 50 popular brands, such as Aashirvaad and Sunfeast to Classmate and Bingo! In FY18, the non-cigarette FMCG business revenue was Rs 11,328 crore, while gross profit of the business was Rs 164 crore.
According to Deveshwar, building successful Indian brands has been ITC’s biggest achievement in an FMCG market that is dominated by multinationals. He has an ambition: to grow ITC’s non-cigarette FMCG business revenue to Rs 1 lakh crore by 2030, in the process becoming the largest FMCG firm in the country beating Hindustan Unilever. Puri has time and again said ITC is on the path to achieve Deveshwar’s vision despite of external hiccups like implementation of GST and weak monsoon.
Led by Deveshwar, ITC has received significant global and national recognition for its pioneering work in creating sustainable communities as part of efforts to transform rural India. Some of its achievements have been featured as case studies at Harvard Business School. Harvard had ranked Deveshwar the seventh best-performing CEO in the world in 2012, alongside icons like Apple’s Steve Jobs. In 2011, he was conferred the Padma Bhushan.
Under him, ITC’s focus is on sustainable growth. It has been carbon positive, water positive and solid waste recycling positive for more than a decade years. All its luxury hotels are LEED Platinum certified. Renewable energy constitutes about 48% of ITC’s total energy consumption. It has created 6 million jobs in the country.
Deveshwar has ensured ITC is on a firm footing as a truly global Indian conglomerate with a focus on social development. Such efforts, he believes, will boost the overall economy of the nation. “The mission to create world-class brands in India must, therefore, assume the fervour of a national movement,” he said some time ago, adding: “Such world-class Indian brands will help create, capture and retain larger value for the economy.”
Talking to ET, Mahindra Group chairman Anand Mahindra paid his tribute to Deveshwar:
"l will always remember Yogi for two things: first, he was a dragon-slayer; a man who was never afraid of taking on the mightiest of adversaries and the greatest of challenges. Even as he did this, he always had a smile on his face and a good word for all. Second, he began working in what was a multinational from overseas, but by the time he was done, it had been transformed into a true Indian multinational."
ITC ex-director Pradeep Dhobale, who retired in 2015 and had worked closely with Deveshwar, recalled his softer side.
"He was my direct boss for 16 years. Everybody knows him as a visionary, a strategist and a demanding boss. But I have experienced his softer side. In 1999, ITC Bhadrachalam was making losses with not enough money to even pay salaries. While handing over the mantle to me to lead the business, his comment was 'I am giving lives of two thousand families in your hands. Please take care of them'," Dhobale told ET.