The Hindu Business Line : “There’s a long distance to go.”

If I look at 2008 there have been launches of two major products from among our global top two brands. One is AirWick, in the air-freshening market which is a nascent space. If you really look at consumer habits they probably use agarbattis (to a large extent). We have come up with a whole range of products – gels, electricals, aerosols – that’s where our investment is going now. We have also relaunched Clearasil, which has come back into the market last 4-5 months. Last year was Strepsils; it came back into the market. So, it’s one after the other. Reckitt globally has a large portfolio but having said that it also has to do with how we develop our existing product categories; there’s a long distance to go.

Post delisting has there been any change in management structure and your investment plans?

As a global company, we are present in 60 countries. Only our parent company is listed on the London Stock Exchange and the only other country is Bangladesh because of local investment laws. The key reason for that is we would like to invest what we like to, and the investment plan depends on opportunities and needs.

We have put up a huge plant in Uttaranchal, which started manufacturing in mid-2007. It’s a multi-product plant – soap line, liquid line, powder line, shaving cream; it is in the fiscal zone so the benefits carry on till 2016. We have invested around Rs 75 crore. Another mega facility has come up in Jammu, the pest facility, where we make Mortein coils, aerosols, electricals … this also we started in late 2007.

What about the South? Aren’t you looking to invest in that region?

We have our Dettol facilities in Mysore. It’s an old investment, it’s a pharma plant which makes Dettol and Disprin. Then, we have a facility in Hosur for chemicals.

Does the tax holiday you get for your Uttaranchal plants help outweigh the costs you incur on freight to ship your brands down South?

I would go further than that; freight is only one aspect of it. If we had not got these plants we would have to increase our prices very significantly. A simple example: If you take the base raw material on soap, palm oil, prices have gone from Rs 1,700 a tonne to Rs 3,700 a tonne, they have come back a bit, but if 80 per cent of your raw material goes up more than 100 per cent, what do you do? So, a lot of benefits we got have gone to subsidise cost increases and keep prices in check. Let’s say the bottom line would not be there if I had not got some of these benefits and that helps the continuity of business.

Is there any danger of your brands becoming so popular that they almost turn generic brands?

The danger I see is in terms of generics promising what they don’t deliver. In that the biggest loser is not brands but the consumer. Dettol is among the top ten trusted brands over the past two decades.

What kind of shares do your brands have now?

In antiseptic liquid we are 80 per cent plus share, in liquid hand wash we are 55 plus share, Lifebuoy is a distant second. The toilet cleaner market size is Rs 200 crore and Harpic is 80 per cent of that.

What about the mosquito repellent category? It’s growing fast but very competitive, isn’t it?

It’s a category that will do well with some government support both in terms of taxation levels and public health campaigns. Competition is intense but there are only three big brands. Though it is a huge market worth Rs 2,000 crore, it is very expensive to be in the category as the return on investments is virtually nil. The major brands are Mortein and Good Knight. Mortein as a brand has 26 per cent share of the entire industry. Godrej Sara Lee has Hit and GoodKnight, while All Out, owned by S.C. Johnson, is the number one in the liquid electricals market. In the electricals, we now have 20 per cent of the market. It is a difficult number, because in what is tracked by Nielsen there is a big gap. Odomos came in with electricals and coils but has only one per cent of the market. The largest segment is coils, then electricals, followed by aerosols.

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