Companies

Jyothy Laboratories eyes regional fabric care brands

Purvita Chatterjee Mumbai | Updated on February 23, 2011

Mr Ulhas Kamath, Deputy Managing Director, JyothyLaboratories.   -  Business Line





Mumbai-based Jyothy Laboratories has set aside Rs 300 crore to acquire more regional fabric care brands. Targeting small regional companies in the pre-and-post wash segment, the Rs 800-crore FMCG company is busy scouting for brands which can go national in the long run.

Speaking to Business line, Mr Ulhas Kamath, Deputy Managing Director, Jyothy Laboratories, said: “We are a debt-free company and will not be borrowing money to buy brands. There is extra cash of Rs 300 crore in our balance sheet and this forms part of the internal accruals and QIPs which will help us in acquiring more fabric care brands.”

In the past, Jyothy Laboratories had acquired two fabric whitener brands – Morelight and Ruby (both brands were bought at less than Rs 20 crore) and has grown the sales of these brands. Through these acquisitions Jyothy has emerged as a leader in the fabric whitener space with an 80 per cent share in the category led by its brand Ujala.

“We are looking at other categories within fabric care which could range from fabric softeners to stain removal products. We are doing due diligence with small regional companies with low valuations. These should be regionally strong profitable brands that can go national,” said Mr Kamath, without divulging any names.

In fact, Jyothy Laboratories would not look at entering cluttered categories such as personal wash as it did try launch an herbal soap like Jeeva, which is now restricted it to the southern markets. Considering there has been speculation about the company being in the race to acquire Henkel's soap brand – Margo, Mr Kamath wants to set the record straight.

“Personal wash is a cluttered market and a highly evolved category. We are sceptical about entering this category as it is not easy to shift consumers who are regular users of a particular brand in this category.”

Besides, the company would invest Rs 100 crore into its laundry business, which has been set up through a separate subsidiary – Jyothy Fabric care services. “We would be roping in private equity players as investors into the laundry business as we expand the operations. Currently we are in the process of deciding upon two private equity players who would be investing into this business, added Mr. Kamath.

Meanwhile, the company's flagship brand Ujala is betting on its brand ambassador Sachin Tendulkar to drive more sales. Looking forward to the World Cup matches where it has bought advertisement spots, Ujala is expected to get mileage from the event.

“IPL is going to be expensive but we have set aside a small budget for the World Cup and hope to get some mileage with Sachin as our brand ambassador, added Mr Kamath.''

Published on February 23, 2011

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