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Dabur on fast track to good health

June 02, 2008 11:14 IST

After hiving off its non-oncology drugs business last year, the Dabur group recently divested its entire stake in Dabur Pharma to Fresenius Kabi, a 100 per cent subsidiary of the Germany-based healthcare group Fresenius SE.

While the pharma sector in India may be looking up, for the Dabur Group, the move is in line with its desire to maintain a strong foothold in the FMCG sector that is poised to grow by 16 per cent this financial year compared to the 12 per cent growth rate in pharma.

"We sold off Dabur Pharma because we wanted to put all our efforts into FMCG. Plus, we now have very specific plans for the Dabur Group, that is, we want to be a niche player and not a mass market player, which means we have to work on our strategy and brand positioning," says Amit Burman, vice-chairman, Dabur.

Brand positioning for the company means further building on the health bandwagon that already exists, thanks to its products like Chyawanprash, Hajmola and Pudinhara. Now it is fiercely targeting the drinks market with its Real Activ brand.

Real Activ, according to Burman, is the company's answer to the juice commodity market. "Juices have now become a commodity rather than a health drink. That is the mould we want to break," he says.

Burman believes that Coca-Cola's Minute Maid is advertised in a way that makes it seem like a health drink with orange pulp. The truth is that the drink is only 10 per cent orange juice and the rest is water and sugar, he observes.

Real sales are already double of Pepsico's Tropicana.

"Our plan is to move out of the fruity commodity game and get into healthy juices and other products," says Burman.

Apart from juices, the focus is on oral care, shampoo, homecare and foods segment. Already, according to a recent report by AC Nielson, Dabur's oral care segment has come out tops as the fastest growing oral care brand in the country at the rate of 37.1 per cent for April-December 2007.

It surpasses the segment growth that stood at 13.5 per cent.

But Dabur also wants to turn its watchful eye on the shampoo market. The company is ambitiously investing in scientifically researching and developing ayurvedic products in this segment -- an advantage that no other MNC has.

Improving its retail presence is also on the agenda. Burman admits that Dabur's distribution system does not allow its food products to reach the interiors. The issue, he hopes, will be tackled by the newly restructured company.

"We have merged Dabur Foods and all other Dabur subsidies under one umbrella -- the Dabur India entity. This means that everything will be distributed through every distribution channel that Dabur India has access to."

From FMCG to retail, the walk was only logical. Burman recalls that the family saw an opportunity in the retail sector and keeping in line with its emerging image, grabbed the vacant space in the health and beauty segment to launch its New U stores.

"Since this is a completely different business for us, we are investing in it as a company and have already opened five outlets of the 350 we have in the pipeline," Burman concludes.

Radhieka Pandeya in New Delhi