The Hindu Business Line : Godrej Consumer to continue focus on personal, household care products

Growth plans
The company would like to have acquisitions that would help GCPL in its hair care, hair colour business.
It has also planned to introduce its low-cost hair colour technology in the African market.

MR ADI GODREJ

Coimbatore , Nov. 9

Godrej Consumer Products Ltd (GCPL), while open to the idea of acquisition of brands as part of its inorganic growth strategy, would continue to focus on personal and household care business and would not look beyond this segment, according to Mr Adi Godrej, Chairman and Managing Director, GCPL.

The company, which acquired the Keyline brand of the UK about a year ago , is conducting consumer study before launching any product from Keyline range in the country , he said.

Answering a question at an investors/analysts' conference call last week after the release of second quarter results on what business the company was looking at for possible acquisition to power its inorganic growth, he said his strategy on acquisition was to add strong brands in India, if there was an opportunity in the personal or household care field. He said, "We look upon ourselves in the personal and household care business. So we would not go outside these areas at all."

Mr Godrej said that his company would like to have acquisitions that would help GCPL in its hair care , hair colour business since it has strong technology there and added "that will be the focus of our international acquisition." On the question of launch of Keyline products in the country, he said his company was working on that but had not launched any product. Godrej Consumer Products was looking at introducing `Erasmic' brand (men's grooming product). It used to be a popular brand in India but has not been present in the market for the past 15 years. The company was doing consumer research before taking the plunge, he added.

He said the acquisition of Keyline brands and Rapidol UK and its subsidiary were `earning accretive'. While the former has enabled GCPL to widen its reach in areas such as Europe, Australia and Canada, the latter gave it an entry into the South African market and markets in other African countries.

He said his company proposed to "leverage the benefits of these acquisitions by introducing some of our products in geographies where our brands enjoy a strong presence as well as introducing in India some of their products which we believe enjoy strong potential." The company has also planned to introduce its low-cost hair colour technology in the "large and relatively untapped African market."

Growth slowdown

On the slowdown in the growth of hair colour business this year compared to last year, Mr Godrej said the growth last year was higher because the company opted for a price increase but this year it has not done so yet. A lot of its competitors have gone for a price hike. He said, "We are looking at a possible price increase, we are looking at re-launching our powder hair dye which is our biggest seller" and felt that an "improved product with a price increase might be a solution to a low growth rate."

The CMD said the growth rate of Godrej's soap business was very good, `ahead of the market growth rate'. He said with the increase in the price of inputs, the `entire soap industry is taking a price increase'. Some of the soap manufacturers have already increased the prices. He said the company would effect the price increase across its soap brands. While in the more expensive brands the percentage of increase might be lower, in the cheaper brands the percentage might be higher. He expected the profit margin to improve in the third and fourth quarters of this financial year.

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