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British major Reckitt Benckiser India has hiked product prices by three-five per cent across categories with immediate effect, due to input cost pressures. The company said that it is registering a healthy double-digit growth in India.
Reckitt Benckiser had early this year upgraded India to its regional headquarters for South-East Asia, covering 12 nations representing a market of 1.8 billion people.
Mr Chander Mohan Sethi , Senior Vice President - South East Asia, Reckitt Benckiser, said, “While American and European markets are huge, they are witnessing a low one-three per cent growth. Therefore, we have decided to focus on developing markets.”
That was natural, given the growth the company has been experiencing in India. “We are witnessing a high double digit growth in India. Urban sales are growing at 20 per cent and rural sales at 30 per cent,” Mr Sethi revealed.
Twenty five per cent of the sales come from the rural markets.
The parent company has set a target of two per cent of net revenue growth above market growth on average each year, in the next five years. “Emerging markets are going to be 50 per cent of “core” business net revenue by 2016 (up from 42 per cent); and health and hygiene would be 72 per cent of core business net revenue by 2016 (up from 67 per cent),” a company statement said.
Last April, the company had acquired Paras Pharmaceuticals along with its personal care business. It also sold personal care business to home-grown Marico in February.
“Selling off the personal care business and retaining Paras Pharmaceuticals was a strategic move as we are increasingly going to focus on health and hygiene,” Mr Sethi added.
He said that the company is currently test-marketing two drugs — Gaviscon and Mucinex — in Karnataka and Tamil Nadu.
restructuring strategy
The English parent is estimating a one-off cost of £75 million this year to implement the new restructuring strategy. These costs are for implementing the new focus on developing markets and health and hygiene segments, and making some supply chain and manufacturing enhancements.
The domestic arm plans to allocate 16-18 per cent of their revenue to marketing in the current fiscal.
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