West Asian crisis looms large over revenues of FMCG firms

The West Asian crisis could drag revenues for major FMCG players ? such as Britannia, Marico, and Wipro Consumer Care and Lighting ? that have a strong presence in the region.

Analysts point out that West Asia and Africa generate almost Rs 200 crore in revenues for companies such as Britannia and Marico. According to Mr Chitrangda Kapur, research analyst, FMCG and media, Angel Broking, about 5-7 per cent of Marico's revenues could get hit this quarter because of Egypt and the Bahrain-Oman crises. For Asian Paints, almost 50 per cent of its international business comes from West Asia. ?Although other regions, such as Sri Lanka, Nepal and Bangladesh, have done well for the company in the last few quarters, the revenues are likely to drag because of the West Asian crisis.?

Wipro Consumer Care and Lighting (the FMCG arm of IT major Wipro), which acquired the Yardley brand last fiscal, has a strong presence in the West Asian markets, with almost 70 per cent of the brand's revenues coming from the region. Wipro said it will not respond to any queries because of the silent period, but it had earlier stated it expected to double its revenues from West Asia during this fiscal from the Rs 70 crore it was clocking at the time of the acquisition.

Britannia's Managing Director Ms Vinita Bali too had recently admitted to revenues being hit by unrest in Egypt and Libya though her company did not share any updates on the crisis.

Mr Arvind Singhal, Chairman, Technopak Advisors, however, said, ?There are no signs of a serious disruption for most businesses like Britannia, Wipro and Titan.?

Dubai-based retailer Landmark Group, that runs Lifestyle, Spar, Max and Home Centre stores, has 58 stores in Bahrain, 37 stores in Oman and 11 stores in Egypt. Mr Ramanathan Hariharan, Director, Landmark Group, said these stores account for less than five per cent of the company's revenues. ?Because of the curfew in Bahrain, we were not able to trade fully for the last five days, but the situation is returning to normal now,? he said.

For jewellery manufacturer Rajesh Exports too, Bahrain and Oman account for five per cent of the business. ?The negative impact is that expats are leaving from there. But it has also led people to buy gold as they consider gold as a safe haven in uncertain times,? said Mr Rajesh Mehta, Chairman, Rajesh Exports.

Titan Industries retails its watches at multi-brand oultets in Bahrain and Oman through distributors. International markets account for 7-8 per cent of the company's overall sales, and these two countries account for 15 per cent of international sales, which is marginal, according to the company. ?It is still early days, and it may require a week before we can assess the situation there,? said Mr Harish Bhat, Chief Operating Officer, Titan Industries.

Apparel retailer Arvind sells the Arrow brand through distributors in Muscat, but the market is too small to affect the business, said Mr J. Suresh, Managing Director, Arvind Brands and Lifestyle. Last year, Arvind had bagged the licence to distribute the ?Cherokee' brand in West Asia, including Oman and Bahrain, through the Lulu retail chain, but it has not taken off as yet. ?Last year, we had big plans for Cherokee, unfortunately the tie-up with partners did not happen. Now with the uncertain situation, we are thinking why get there unnecessarily,? debated Mr Suresh.

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