Marico will not hike product prices in near term

Marico, the maker of Parachute coconut hair oil and Saffola edible oil, on Monday said it will not take any product price hikes in the
near term after gauging the softening trend in copra, a key raw material.

In fiscal 2011, the company was forced to hike prices multiple times to the extent of 32% as copra prices saw a steep rise.
Marico officials, Saugata Gupta, chief executive officer, consumer products and Milind Sarwate, group chief financial officer, addressing an analyst concall, said the volume growth in hair oil business during the fourth quarter was 13-15% led by the value-added hair oil segment.

This fiscal, the company expects to grow the coconut hair oil business consisting of brands Parachute and Nihar 6-7%, but the value-added hair oil category where the company sells amla oil, cooling oil and ayurvedic oil in Southern India markets, is likely to see strong double-digit growth.

Gupta and Sarwate said the company has been gaining market share in hair oils and will up advertising and promotion spends (A&P) this fiscal to maintain its market position.

The company plans to increase A&P spends from 9-11% during fiscal 2011 to 14-15% for fiscal 2012 with a conscious strategy to focus on its core brands.

Company’s international business that now accounts for 23% of the group’s turnover grew by 22% in fiscal 2011 over the preceding fiscal while the domestic business grew 14%.
Topline, however, was impacted by `20 crore owing to the disruption in the MENA (Middle East and North Africa) region during the fourth quarter.