Marico acquires Colgate’s hair-care brand in Malaysia

Fast moving consumer foods (FMCG) company Marico Ltd announced the acquisition of Colgate-Palmolive Company’s hair-care brand ‘Code 10’ in Malaysia on Monday.

Marico has acquired the brand for an undisclosed amount through Marico Malaysia Sdn Bhd, a wholly owned subsidiary of Marico Middle East FZE.

Currently, Marico Malaysia Sdn Bhd sells only two Marico brands, Parachute and Nihar Coconut Oil, targeting the Indian diaspora there.

The Code 10 acquisition will mark Marico’s entry into the hair cream and hair gel segment in the South East Asian market. “The hair styling market in Malaysia is in excess of Rs 20 crore, with Code 10 being the third-largest player in the segment with market share in strong double digits,” said Vijay Subramaniam, chief executive officer, international business, Marico.

Marico Malaysia and Colgate-Palmolive have signed a transition services agreement, which states that Colgate-Palmolive will continue to distribute the Code 10 range of products for six months.

“Code 10 will be established under the Marico distribution system from June 2010. Stabilising the brand in existing markets, namely, Malaysia, Singapore and Brunei, is our priority. We will then explore expansion into other lucrative markets in Southeast Asia. We now look forward to faster organic growth in this region,” said Subramaniam.

Marico will continue to look at acquisitions in the beauty and wellness space and focus on emerging markets in Asia and Africa. Marico leads the key hair styling segments in the Middle East, Bangladesh and Africa. According to Subramaniam, “Entering Malaysia was the next logical step.”

Marico’s international business now contributes over 20% to its revenues from 7-8% about 3 years ago.

The company has acquired 4 international brands in the last 3 years. Marico’s products and services in hair care, skin care and healthy foods generated a turnover of Rs 2,390 crore in FY09.
Marico’s portfolio includes well-known brands such as Parachute, Saffola, Mediker, Revive, Fiancee, Hair Code and Caivil.