The Hindu Business Line : Marico enters S. African hair and healthcare market

Mumbai, Oct. 31 Marico has announced its entry into the South African ethnic hair care and healthcare market with the acquisition of the consumer division of the Durban-based Enaleni Pharmaceuticals. It has made the acquisition through purchase of 100 per cent shares in Enaleni Pharmaceuticals Consumer Division (Pty) Ltd (EPCD), an Enaleni subsidiary. The deal is valued at about Rs 52 crore and was achieved through competitive bids.

The Durban-based EPCD is present across segments such as hair relaxers, after care-hair food and hair conditioners. EPCD’s annualised turnover stands at Rs 53 crore and it operates leading brands such as Caivil in premium ethnic hair care, Black Chic in VFM hair care, Hercules in OTC health care.

Announcing the acquisition in Mumbai, Mr Harsh Mariwala, Marico Group Chairman, said: “It provides us an opportunity to participate in the rapidly growing ethnic consumer products market in South Africa. The acquisition helps us extend the Marico footprint to a new geography with potential, thus taking us a step further towards becoming a global player in beauty and wellness.”

Market-size

The market for ethnic hair care and relevant OTC healthcare products in South Africa is estimated to be in the region of Rs 600 crore and is growing in excess of 20 per cent. EPCD’s market share in relevant segments of hair care is about 5- 6 per cent, going up to 9-10 per cent in relevant OTC segments. The brands are also present in key super market chains like Clicks & Discom, with about 10 per cent share.

The competition comprises local brands such as Amka and Western MNC brands of Unilever and L’Oreal. Mr Vijay Subramaniam, CEO, International Business, Marico, said: “This acquisition helps us to consolidate our position in Africa, as it complements our entry into Egypt last year. Caivil & Hercules are brands with good equity. We will invest in these brands and expand the franchise over a period of time.”

Value to both parties

The acquisition comes with integrated operations, including the manufacturing facilities at Mobeni, Durban, along with a team of about 100 members. EPCD will continue to be operated by the local management. According to Marico, the deal provides value to both the parties. For Enaleni, it gives sharper focus on their significantly larger core business in pharmaceuticals. For Marico, it provides an entry in South Africa, through successful brands.

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