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Post acquisitions, Godrej redraws future plans

Last updated on: April 18, 2011 12:50 IST

Image: Plan is to ensure the group operates as a cohesive unit.
Photographs: Reuters Viveat Susan Pinto in Mumbai

It has been a year since the Mumbai-headquartered Godrej Consumer Products made a string of international acquisitions in Asia, Africa and Latin America.

It has set in motion an integration exercise that will see it transfer its category knowledge and expertise in hair colour and household insecticides to the acquired units.

This is also to fill the gaps in its portfolio following the exit of one-time partner Sara Lee Corporation's brands such as Kiwi and Ambipur.

The plan, according to A Mahendran, Managing Director, is to ensure the group operates as a cohesive unit, with the ability to leverage each other abilities and strengths.


Post acquisitions, Godrej redraws future plans

Image: Argencos was merged in December to form Godrej Argentina.
Photographs: Reuters
So, apart from a transfer of category knowledge and expertise, plans are afoot to increase global sourcing and empowering local managements, says Vivek Gambhir, chief strategy officer, Godrej Industries.

The company is also putting in place a regional blueprint involving merging entities within a region or country, if required for better operational efficiencies.

For instance, Issue and Argencos, both based in Argentina, were merged in December last year to form Godrej Argentina.

The same goes for Rapidol and Kinky in South Africa, now merged into Godrej Africa.

"It makes sense to simplify operations," says Gambhir.

On the transfer of technology, Mahendran cites of Indonesian acquisition PT Megasari Makmur.


Post acquisitions, Godrej redraws future plans

Image: Stella, air freshner, is present in Indonesia.
Photographs: Reuters
"It is the leader in household insecticides in that market. So there is no requirement for us to take our expertise in that category to that market.

"The vacant slot is hair colour, which we will take there. The same goes for the Argentinian market, which is strong in hair colour. We we will take household insecticides there," he says.

And, what will GCPL borrow from these markets? Stella, the air freshener from Indonesia and the Roby line of hairstyling products from Argentina.

"We are seriously considering air care as a category to get into. It's a bit easier for us, given the presence of Stella in Indonesia," Mahendran said.

"The same goes for Roby, which could replace Brylcreem once it is withdrawn. But shoe care is not a category we are keen on. It is too small a category in India," he says.


Post acquisitions, Godrej redraws future plans

Image: Argentina's Roby could replace Brylcreem.
Photographs: Reuters
GCPL is the leader in both household insecticides and hair colour in India, with market share of about 37 per cent and 30 per cent, respectively.

In soaps, however, it trails Hindustan Unilever, with a share of 10 per cent only.
Mahendran says there are no plans to take soaps to allied markets.

"Personal wash as a category is very mature across the world. There are no plans to take that to markets in our universe where the slot is vacant. It is an evolved category, with well-entrenched players," he says.


Post acquisitions, Godrej redraws future plans

Image: Godrej acquired Tura brand of soaps in Nigeria.
Photographs: Reuters
Instead, markets that have a personal wash presence such as Nigeria, where GCPL acquired the Tura brand of soaps from the UK-based Lornamead group (better known for its Yardley brand of fragrances, talcs, among others) will step into areas such as household insecticides and hair extensions to widen its ambit of operations.

Mahendran admits of the three categories it plays in, household insecticides will be taken to every market to become the number two company in the world in that space.

"We will use every lever possible, both organic and inorganic to achieve that," he says.

As things stand, US-based SC Johnson is the largest household insecticide player in the world, followed by UK-based Reckitt Benckiser at number two and GCPL at number three.

Source: source