GCPL buys South African hair colour company

MUMBAI: Godrej Consumer Products (GCPL) on Tuesday said it is buying the South African hair colour business of UK’s Rapidol, which is held through the latter’s South African subsidiary Rapidol International, for an all-cash deal.

Its turnover was 52 million South African Rand, (about Rs 33 crore) in 2005 and is a profitable entity.

According to Hoshidar K Press, president, GCPL, the acquisition amount would be between Rs 33 and Rs 66 crore (one and two times Rapidol International’s sale).

With brands like Renew, ColourSoft, Kesh Kala, and Renew, Godrej is a market leader in the hair colour business, with about 40% market share.  The business is also highly profitable, which contributes 25% to the company’s topline and 65% of its operating profits.

The segment is growing at an annual rate of 25%, though of late, Godrej has been lagging the industry’s growth.

Globally, the hair colour market is believed to be twice the size of toilet soaps, the company had said during an analyst meet recently.

Press said Rapidol is the market leader in South Africa’s ethnic hair colour markets. “We are in the black hair colour market. There are over 40 African nations we can export the product to,” he said.

Along with Rapidol’s two brands, Inecto and Sofelene, GCPL would have access to its manufacturing unit, which currently employs 45 people. An analyst said GCPL may outsource manufacturing to India since it has spare capacity.