Godrej Consumer weighs entry into multiple categories

Godrej Consumer Products Ltd (GCPL), the homegrown fast moving consumer goods major, is evaluating entering multiple new products categories this fiscal, A Mahendran, managing director, said.

The maker of GoodKnight and Hit brands of household insecticides will look at foraying into newer household care categories like surface cleaners and liquid detergents. In hair care where it sells Expert, Renew and Nupur brand of hair colours in the domestic market, the company is evaluating launches in the hairstyling space and a professional hair care range that it can push through the salons and beauty parlours; Mahendran said.

Till three years ago, GCPL was known to be a toilet soaps major. After a spate of acquisitions, the company is aiming to be a leading global player in household care and hair care categories.
On Monday the company posted a net profit growth of 54% at Rs142 crore in for the fourth quarter of the fiscal 2011 compared with Rs91.76 crore in the same period last year. Its net sales grew 96% at `999 crore.

From contributing 18% to GCPL’s business last financial year, international business — across Indonesia, Middle East, Africa, Latin America, and the UK — accounted for 35% in the fiscal 2011.
Company’s household care and hair care business grew 17% and 18%, respectively while toilet soaps business grew 13%.
Adi Godrej, chairman, GCPL, said the trend of household care and hair care businesses growing faster than toilet soaps will continue.

“There are margin pressures in soaps business, however, palm oil prices in the last two months have started coming down,” Godrej said.

Household insecticide makes for 40% of group’s revenues, toilet soaps and hair care make for 30% and 20%, respectively and toiletries make up for the remaining business. In the years to come, the contribution from toilet soaps could lower further as household insecticide grows faster, but the company wants to guard its position of being the second-largest soap-maker in the domestic market.

Going forward, the company’s focus will also be to acquire strong and regional brands across Asia, Africa, and Latin America that are dominant players in the categories of hair care and household care.

The company is also looking to introduce some of its acquired products overseas in the Indian market. GCPL in India has already started to incorporate learnings from its Latin American companies, Issue Group and Argencos SA, in the domestic hair care business where it has brands like Expert, Renew, Godrej and Nupur.