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Zydus Group’s personal care and wellness arm, Zydus Wellness Ltd, is looking at promising acquisition deals in India and abroad in the personal care and health food segments.
The company is learnt to be hunting for a suitable buy of an emerging brand having a potential market in West Asia, Africa, South-East Asia and SAARC regions besides looking for an attractive deal in India.
Speaking to Businessline , Tarun Arora, Chief Operating Officer and Director, Zydus Wellness Ltd, said that the company is evaluating various options that are in synergy with its existing business and the company’s growth strategy.
"The best fit geography (for acquisition) will be India but there are other potential geographies such as Middle East, Africa, South-East Asia and SAARC region, where we can have increased access to these markets. The acquisition will be in the categories of health and wellness products," Arora said, adding that the company has created a negative list, where it doesn't prefer to go such as colour cosmetics.
"Preferably, we may look at the skin care and hair care products in the personal care segment in India. For geographies outside India, sugar substitutes may be more relevant," he said.
In its latest investor presentation, Zydus Wellness informed that the company has maintained 13 per cent CAGR growth in sales between fiscal 2009 to fiscal 2016, while its EBIDTA margins improved from 19.9 per cent in fiscal 2009 to 21.2 per cent in fiscal 2016.
Growth strategy
In early 2015, the company did a trial of Sugar Free made from natural leaves of stevia plant. Arora admits to initial setbacks to the product but in March 2017 after a full-fledged launch, the Sugar Free Green (made from stevia) yielded desired results for the company. Sugar Free commands 94 per cent of the market share in the sweetener category with table-top liquid and palettes variants.
"We learnt a few things after initial setback. We invested further for awareness building and after March 2017, there were improvement in our numbers every quarter. We are on our good path and we have more in pipeline now," he said, adding that the challenges lie in being competitive and innovative.
The three categories of the company are sugar substitutes, skin care and health foods. Zydus Wellness has a strong positioning in the sweetener category with its Sugar Free brand with 94 per cent market share, while its Nutralite in Fat Spread category stands top with 40 per cent market share. Everyuth brand having scrub and peel-off variants stands top in personal care category.
The company's other growth strategy relies on innovation and strengthening existing brands, as well as focusing on international business with expansions in markets such as Gulf Cooperation Council, Africa and South East Asia.
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