Smaller FMCG cos sell off popular brands as competition hots up

PTI New Delhi | Updated on May 08, 2011

In the face of tough competition from biggies like HUL and P&G, smaller FMCG firms, including Ajanta Pharma and Ozone Ayurvedics, are selling off their popular flagship brands as they find it increasingly tough to grow them.

While Ozone Ayurvedics is looking at selling off its flagship personal care brand ‘Nomarks’, Mumbai-based Ajanta Pharma has recently sold off its popular energising capsule ‘30-Plus’ due to change in priorities and as the brand has become stagnant.

“The issue is if the management is unable to support the brand or not finding it profitable, the best route is to sell it off,” Mr Shirish Pardeshi, an analyst with Anand Rathi Financial Services told PTI.

As the brand grows, it is important to have the kind of distribution and scale of economy that it requires to compete with much stronger brands, he added.

Ozone Ayurvedics, which sells personal care brand ‘Nomarks’, said it is willing to sell it off to an appropriate buyer which has the right network to make the product more lucrative.

‘Nomarks’ competes with the likes of ‘Fair & Lovely’ from HUL and Reckitt Benckiser’s anti-marks cream ‘Clearasil’.

“If we find any firm, with great distribution channels, who wants to buy (Nomarks), we will consider it,” Ozone Ayurvedics Chairman and Managing Director Mr S C Sehgal said, adding till date top six to seven firms have approached them.

He claims the brand, which garners an annual sales of Rs 60 crore is still profitable. It is just that his firm has not exploited the true potential ‘Nomarks’ as it has been focusing on other areas.

Similarly, Ajanta Pharma sold off ’30-Plus’ to leading FMCG firm Dabur, which has a more stronger distribution channel and has been aggressively looking at expanding its healthcare portfolio. The company said the OTC brand has not grown though it still enjoys a strong recall among consumers.

“With the change in focus at Ajanta Pharma, 30-Plus’ was stagnant for some time, though it still enjoys a strong recall as an energiser brand,” Ajanta Pharma Managing Director Mr Yogesh Agrawal said.

According to Mr Pardeshi of Anand Rathi, brands like 30-Plus and Nomarks have established themselves among consumers.

“But it has to go beyond in terms of their geographic expansion or making it more larger than what it is. Management needs to do justice to it,” he said.

Last year, despite having strong brands like Moov, Krack and Set Wet, Paras Pharmaceuticals was acquired by British firm Reckitt Benckiser for Rs 3,260 crore.

Published on May 08, 2011

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