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Oral care manufacturing company JHS Svendgaard Laboratories plans to acquire a south-based personal care product manufacturing company for about ₹75 crore.
JHS, which has a manufacturing facility at tax-free zone in Himachal Pradesh, makes toothpaste, toothbrush, and mouthwash for almost all leading brands including Colgate, Dabur, Patanjali, Emami and Apollo.
The company is now planning to acquire a personal care company in the south to enter a new business segment, and start oral care product manufacturing from the new unit.
The Himachal unit of JHS has capacity to make 175 million toothpaste, 250 million tooth brushes and 18 million mouthwash bottles.
The company recently launched its own kids’ toothpaste and toothbrush product ‘aquawhite’, riding on its licence to use prominent cartoon such as Chhota Bheem, The Jungle Book, Pokemon, PAW Patrol, Shimmer and Shine, SpongeBob Squarepants, and Shiva for branding. It has also roped in actor Tiger Shroff as its brand ambassador for the kids’ oral care products.
Nikhil Nanda, Managing Director, JHS Svendgaard Laboratories, said that the company was already in advanced talks with three companies for acquisition, and said that the deal would range between ₹35-75 crore, depending on which one is finalised.
“The company will install facility to make oral care products in the acquired unit,” he added. “We will also move a part of manufacturing from Himachal to the south to service customers better and bring down cost to 6-8 per cent from 10 per cent,” he said.
Of the ₹13,000 crore oral care market, the kids segment account for ₹340 crore. Toothpaste market accounts for ₹9,200 crore and toothbrush adds up to ₹3,100 crore, while toothpowder and mouthwash account for the rest.
Nanda said JHS Svendgaard will fill the vacuum in kids oral care segment as no major brand is focussing on it. In next 8-10 years, the kids’ oral care market should touch ₹2,500-3,000 crore. “Though higher wage structure in south would push up cost of production marginally, it will be neutralised by better efficiency,” he said.
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