The Rediff Interview/Hiren K Patel, CMD, Nirma Consumer Care
'Nirma should be debt free in 18 months'Faced with the slowdown in the detergents and toilet soap categories, the Rs 2,500-crore (Rs 25-billion) Nirma group is excited about its acquisition of the rights for the Camay brand in India.
As per the arrangement, Nirma would manufacture and market Camay locally. The manufacturing would be undertaken by Nirma, while Nirma Consumer Care would pay a royalty on the turnover of the Camay brand to P&G on a quarterly basis. The arrangement is valid for five years.
In an interview with Reeba Zachariah, Hiren K Patel, chairman and managing director of Nirma Consumer Care, and the son of group patriarch Karsanbhai Patel, spoke on the group and its future plans:
All earlier efforts to market Camay in India have failed. Why has Nirma decided to associate itself with a brand that has been a clear failure in India?
We have done a study on the brand awareness of Camay and the results show that the brand still enjoys a high recall. We believe our combination of competitive pricing and a widespread marketing and distribution system will help us translate this high brand recall into sales for the company.
Is the Nirma group looking at bidding for any other public sector undertakings in order to expand? You had made an initial pitch for IPCL
The Nirma group has no plans to bid for any of the companies that have been identified by the government for divestment.
Do you have any plans to expand your international operations?
Our operations in Bangladesh, which was under a joint venture, have been called off. They form an insignificant part of our total turnover. Apart from this, we do not have any plans to expand internationally. Our focus is on the domestic market.
How is your food retailing venture Radhe doing? Do you plan to expand this venture nationally?
Currently, we have two outlets in Ahmedabad. We are still reviewing the operations at these outlets and have no plans to expand nationally.
Are you likely to exit from food retailing?
It's too early to comment on this. We are still reviewing the plans.
What is the current level of debt in Nirma? Are there any plans to retire debt?
Currently, the debt level is around Rs 600 crore (Rs 6 billion). Since Nirma generates cash of over Rs 400 crore (Rs 4 billion) annually, we expect it to become debt-free in the next 18 months.