Financial Daily from THE HINDU group of publications
Tuesday, Jan 17, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jan 17, 2006 |
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Marketing
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Channels and Franchises Gillette to use P&G's distribution network Our Bureau
New Delhi , Jan.16 SEVERAL changes are in the offing at Gillette India Ltd. Though the acquisition of its parent company by Proctor & Gamble is not going to lead to GIL's merger with the former, it will soon begin to use the P&G distribution network for its products. Mr Zubair Ahmed, Managing Director of Gillette India Ltd, said, "We would be closing down our distribution outlets in a phased manner and resort to P&G's network." The existing network, which is 740-distributor strong, would be closed down in three to six months. Following a company board meeting, GIL announced on Monday that the Indian firm will continue as a separate legal entity, but will leverage synergies arising from the acquisition. Under the terms approved by the board, Gillette will "transition from its current distributor structure to that of a P&G distributor." Mr Ahmed said, "We believe the new distribution structure will significantly increase GIL's direct coverage, enhance its wholesale coverage and thereby help service more retailers and reach more consumers efficiently." A company press release added that since a significant portion of the restructuring costs would be incurred in the first two quarters of 2006, these would impact the results of those quarters. Gillette will also offer a voluntary retirement scheme and other packages to some employees who might face redundancy after the new structures and processes are put in place. Some employees would be transferred to P&G Singapore. Gillette will adopt P&G's market organisation structure that will involve moving business units based on geographic regions to product lines. Hence, the company will also relocate from its existing office in Gurgaon to P&G's headquarters in Mumbai.
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