Marico sets up Pyramids date

MUMBAI: Africa is proving to be a hot market for Indian fast moving consumer goods (FMCG) companies.

Making its second acquisition in three months, FMCG major Marico on Wednesday said it is acquiring Egyptian haircare brand HairCode from Cairo-based Pyramids Group for an undisclosed sum. Marico would also invest in the manufacturing facilities of Pyramid Group.

The news came in after market hours, and the stock closed 0.5% down at Rs 554 on the Bombay Stock Exchange. This is Marico’s sixth acquisition in under two years.

“Egypt is one of the largest countries in Africa and its economy is growing. There are tremendous opportunities in the market. With this acquisition, our Egyptian operations would become Rs 100-110 crore in the coming year,” Marico’s finance head Milind Sarwate said.

HairCode range includes hair creams and hair gels. Without providing current sales figures, Marico said it can grow the brand’s turnover to over 50 million Egyptian pounds in the next financial year.

The Pyramids Group will continue to distribute the brand for the medium term and has agreed for a non-compete clause in certain segments.

Without disclosing the profitability figures of HairCode, Sarwate said its PAT (profit after tax) margins were over twice to what Marico enjoys in the domestic market.

Marico had marked its entry into the hair-care market in Egypt when it acquired Fiancée in September this year. The Egyptian hair care market is pegged at Rs 170 crore, growing at 15% annually, and now Marico would stake claim to about half of that.

International business, at about Rs 120 crore, accounts for about 10% of Marico’s revenues. It is looking at growing it to Rs 1,000 crore in four years. After UAE and Bangladesh, Egypt joins the crown jewels of its international business.