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What Dabur promoters plan to do

April 25, 2008 17:35 IST
In a move to focus on its core FMCG strength, the Burman family, promoters of Dabur India, last week announced their exit from the pharma business.

The Burmans sold Dabur Pharma - the oncology drug manufacturing company - to European healthcare major Fresenius SE for about Rs 880 crore (Rs 8.8 billion).

The deal done, the Burman family is now weighing the options to invest this capital.  "The proceeds from the divestment will go into family (Burman) investments," Anand Burman, chairman, Dabur India, told Business Standard. "There are several options we could look at, insurance being one. Going forward we need to re-evaluate our entire portfolio before we invest elsewhere."

Dabur Pharma was originally a part of Dabur India, the flagship of the Burman family, but was demerged as a separate company some years ago.  The Burmans also demerged Dabur Foods as a 100 per cent subsidiary and put it under the charge of Amit Burman. Last year, Dabur Foods was merged into Dabur India under the chairmanship of Anand Burman.

The move was seen as a part of an elaborate succession plan within the Burman family. Amit Burman was made the vice-chairman of Dabur India, leading to speculation that he would take over from Anand Burman, who has a term of five years as chairman. Mohit Burman on the other hand was given the position of chairman of Dabur Pharma.

"Dabur is an FMCG company and the move of the Burmans to exit from the pharma business is aimed at focussing on the high investment intensive FMCG business," said Sujay Shetty, associate director of PricewaterhouseCoopers.

Individually, Amit Burman ventured into the food retail business last year. The business has a chain of quick service restaurants and food courts called Lite Bite Concepts.

The food retail business will have an investment of Rs 200 crore ($50 million) over the next two to three years for setting up 200 outlets across the country - at malls, office complexes, highway locations, and such other places which witness high footfalls. Burman also operates nine franchisee outlets for Subway in India.

On the other hand Mohit Burman, son of Vivek Burman, convinced the family to invest in the insurance business. The Burmans hold a 74 per cent stake in UK's largest insurance company Aviva. The Dabur group also has holdings in ABN Amro and Fidelity.

Recently, he has also stepped into another burgeoning industry with the acquisition of over 14 per cent stake in Punjab Tractors Ltd.  Besides being actively involved in expanding Dabur India's presence in the overseas markets, Mohit Burman also played a critical role in the acquisition of Balsara's Home and Hygiene business by Dabur India.

Now cricket seems to have caught Mohit's fancy and he is one of the four owners of the Mohali IPL team.  Earlier this year, Dabur forayed into organised retail through its wholly owned subsidiary, H&B Stores Ltd. The company aims to establish beauty, health and wellness stores under the 'newu' brand.

The stores offer branded colour cosmetics, fragrances, skin and face care, in addition to baby and family care, fashion accessories and jewellery of exceptional quality and at competitive prices.

Suvi Dogra & Joe C Mathew in New Delhi
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