After emerging as the owner of Henkel India, the home grown FMCG player Jyothy Labs is planning to create a special task force to turn around the loss-making company in the next six months.
The task force would comprise eminent marketing professionals from the industry to improve the growth rates and market share along with a new pricing and positioning for the ailing Henkel brands.
“We should see a real turnaround for the Henkel business in the next six months which is going to be a tough period for us. We also intend bringing down Henkel's debt between Rs 200 crore and Rs 300 crore within the same time,” said Mr Ulhas Kamath, Managing Director, Jyothy Labs.
Cost cutting
Tapping into synergies between the two companies, Jyothy intends bringing down manufacturing costs and use the respective distribution strengths of both the companies. For instance, 70 per cent of Henkel's revenues come from the urban markets comprising defence stores and modern trade while an almost similar percentage of Jyothy's sales are contributed by the rural markets.
“Through Henkel we would be able to get into modern trade more easily while Henkel could take its brands across the country through our distribution network, said Mr Kamath. On a consolidated basis, both the Henkel and Jyothy brands would record a turnover of Rs 350 core in fabric care (Henko, Ujala, Mr White, Chek) with a 6 per cent share in the category.
“We would be re-aligning our pricing in detergents with a brand for every price point from Rs 40 to Rs 160 and become a full-service provider of detergent powders,'' added Mr Kamath.
Pricing of brands
With plans of ‘reinventing' the Henkel brands, Jyothy would be taking a call on the pricing of the brands as some of them still have premium positioning with a popular pricing.
“We would spend around Rs 70-80 crore in the first year on improving the brand health of the Henkel brands,” added Mr Kamath.
Jyothy already has the rights to all the Henkel brands, except Pril and Fa where it would be paying a two per cent royalty on the sales of these brands to Henkel. Post the acquisition of Henkel, Jyothy Labs is expecting to grow at 25 per cent to reach a turnover Rs 1,300 crore in the first year.