The Hindu Business Line : Banga sounds bullish on growth of FMCG sector

THE HLL Chairman, Mr M.S. Banga, has painted a rosy future for the fast moving consumer goods (FMCG) sector by saying that it is poised for a double growth over the next 25 years.

His euphoria stems from the fact that the consumer with aspiration is constantly changing. "Underlying all this growth is the changing consumer who wishes to improve his/her quality of life,'' he said, adding that `youthfulness' of the economy with 500 million people below the age of 25 will fuel further opportunities.

But challenges are aplenty, he said during his keynote address at the National FMCG Conclave, organised by the CII.

One of the challenges is to set up a strong intellectual property rights (IPR) regime in the country.

"There are so many brands that a similar to the original brands but the laws of the land only allows for a temporary closure of these brands. We must have a stronger IPR regime.''

India, according to him, is going through explosive change that is having an impact in the market place.

While the FMCG sector has the opportunity for growth, it cannot rely on price hikes to drive growth.

"In the 1990s, more than half of the FMCG growth came through price increases. Today there is very little avenue to drive prices up. The game is about profitable growth, not just growth. Therefore, there has to be a relentless focus on cost.''

Besides, FMCG companies will have to put a hold on claims in advertising to face up to aware consumers, penetrate into `media dark' areas and manage a range of channels.

According to Mr Banga, there was a huge opportunity in the area of processed foods.

Mr Nadir Godrej, Chairman, FMCG Committee, CII, said: "This year we cannot blame the rains; though we have made some gains we have far to go before we master the art of selling goods much faster.''

Mr Mahesh Vyas, Managing Director and CEO, CMIE, said that the Indian economy was poised to grow by 7.4 percent in 2003-04.

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