Consumer goods firms step up capex to drive sustainable growth
capital expenditure, including on research and development (R&D), to make their products as well as manufacturing processes sustainable and environment friendly, as these factors are becoming crucial for both consumers and investors.
Companies increased their capex up to nine times in the past three financial years, and on R&D by up to four times, to specifically make products and manufacturing processes sustainable, according to an ET study of 15 leading publicly traded companies across fast-moving consumer goods (FMCG), automobile and electronics sectors. For a few companies, expenditure went up on both counts.
«Consumers nowadays, especially the younger generation, are extremely conscious about sustainability and prefer to buy brands who develop sustainable products and use sustainable manufacturing processes,» said Pradeep Bakshi, managing director of Tata-owned appliance manufacturer Voltas. «Even for business-to-business deals, this has become a benchmark.»
He said the company is using components which are greener in nature, along with recycled plastic for some models of air coolers and washing machines, and also pushing for biodiversity inside the factory campuses.
For automakers, most of their capex and R&D expenses are related to electric vehicle development and reduction of emissions from fuel vehicles.
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