ITC's turnover from the printing/packaging business in 1998-99 was Rs 320 crore, out of which Rs 70 crore came from external sources while the rest was accounted for by in-house consumption. The business volumes, including the Rs 182 crore sales of Rollattainers, would cross the Rs 500-crore mark besides giving it a presence in both the north and south Indian markets.

ITC's paperboard conversion capacity at Madras will go up from 32,000 tpa to 50,000 tpa. "We find a lot of synergy in the proposed strategic alliance as ITC is the largest manufacturer of paperboard based packaging and Rollattainers is the country's largest manufacturer of lined cartons and food packaging," a company source explained.

ITC's wholly-owned subsidiary, Russel Credit, willacquire 51 per cent stake in Rollattainers through a preferential allotment of equity shares at a price to be determined as per Sebi guidelines.

The source added that ITC was preparing to effect substantial restructuring in the target company through operational and financial restructuring which would "fuel growth of high quality packaging in the domestic and export markets".

Once the company's conversion capacity is fully utilised, further capacity expansions could be considered. "This is the first step towards more such acquisitions for growth of the packaging business," the source noted.

In 1998-99, the company was able to effect substantial savings in packaging costs as a result of 25 per cent higher operational efficiency and replacement of packaging material imports. Packaging, according to chairman Deveshwar, is a high priority business area where the company would like to grow to the position of industry leader and a global player.