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BW Businessworld

'We Will Be Bringing Acquired Brands Into India'

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Godrej Consumer Products MD, A. Mahendran, discusses the path ahead with BW's Suneera Tandon and explains how the company plans to double its revenues in the next few years

Post multiple acquisitions, what is next for Godrej Consumer Products?
The last three years were the years of acquisitions; 2011 will be the year of consolidating acquired business, interchanging process and policies between domestic and international businesses. 2012 onwards (i.e. 2012-2015) we will look at a long-range plan for the next three years. Our target is to double revenues in the next three years from Rs 3000 + crore to Rs 6000+ cr. Over the next year we are also looking at the organic growth of our acquired businesses.

What are the most dominant categories for Godrej Consumer Products?
Currently household - insecticides comprise 45 per cent of our revenues with brands such as Good-Knight, Hit and Jet; personal care constitutes close to 30-32 per cent revenues, with Godrej No1 and Cinthol as dominant brands. Hair-colour comes third with a 15 per cent share in the business, whereas non-core categories comprise 7-8 per cent. Currently hair care and household insecticides remain growth oriented categories, since the market for them is still in their growth phase. In Q1 2011 we launched two variants under Godrej expert hair colour, Care and Advanced (gel based variant). Soaps on the other hand remain a highly penetrative category (at 90-95 per cent) both in urban and rural, so it is purely a market share game (currently Godrej is behind market leader HUL in soaps with 10.1 per cent market share).
 
In the household insecticides category, rural is a buoyant market. Currently penetration for insecticides in the urban market stands at 75 per cent while in the rural market it is 25 per cent. We are working towards developing a lowered priced product to cater to the bottom of the pyramid consumer. Good Knight remains a dominant brand both for Godrej and the market, followed by Hit (market-leader in the aerosol category).
 
What price-hikes have you as a consumer company taken over the past 1 year?
Commodity inflicted category is only 1 Vis-vis price points the most affected category has been the personal wash (ie soaps category). Since we import our palm crude oil from Malaysia, price hike has been inevitable. On an average we took a planned price-hike of 10-11 per cent across categories over the past 1 year. Since we are not the market leaders we cannot go beyond what the market leader (HUL) decides. But Q2 has seen commodity prices a softening, the trend is looking good. However the volatility of commodity price is unpredictable.

Will there be any cross-pollinisation of products from the acquisitions?
We have recently taken our powered hair-colour Expert (under the Renew brand) in South Africa. We are considering taking products to markets, maybe Indonesia. Vis-versa we will also look at bringing acquired brands into India.

Any new product launches in the pipe-line?     
We will be entering the air-care category soon. For now it is a very small market at an embryonic stage.

(Godrej sold rights of Ambi Pur to Proctor and Gamble last year, as part of Sara Lee selling global Ambi pure rights to P&G)