Emami Ltd is set for a major transformation. The fast moving consumer goods company is moving to the next stage of evolution which would involve a possible venture in packaged foods business and launching premium range of toiletries, taking on the might of multinational rivals like Hindustan Unilever and Procter & Gamble and moving beyond the mass market. The transformation is also about the next generation taking over the management from the founders starting this month through a transition programme to be executed over one-and-a-half-years. Executive chairman R S Agarwal spoke to DNA about the transformation, plans and strategy. Excerpts from the interview: As you plan to retire, how is the next generation taking over?The process of preparedness towards creating successor started this month and it would be a gradual programme for transition spread over one-and-a-half years. Even during transition we will watch how this is working and will always be there to step in to help the transition to be successful. The transition has to be handled carefully as our competitors would try to hurt us during this period and will try to use all tricks to stop us from growing. Successors would be found out within the organisation and within the owners’ families, but if need be there we would bring in one or two persons from outside also. However, the post of chairman would be filled by a person belonging to either of the two families. We have created a team of advisors. That said I believe the new generation who have been actively associated with the business for 13-14 years are very charged and experienced. They have entered at the right age and it shouldn’t be a reason to worry as to whether they are capable of bringing in the innovations which Emami has always been known for.What is your ambition in the mainstream skincare category, especially at the premium-end where HUL and P&G are very aggressive; you have been long present through mass-end brands like BoroPlus and Fair & Handsome?Emami would get into a few premium products. We have concrete plans and a lot of work is going on. Jitu (J H) Mehta, former director of Hindustan Unilever, former Mudra chairman A G Krishnamurty, Alyque Padamsee, former Lintas CEO Pranesh Mishra, and industry veteran Meenakshi Madhvani are all working on this. But we don’t want to change the perception of Emami as a brand which you might think as a mass-market only player. What is the perception about Hindustan Unilever which has products like Lifebuoy, Lux, Rin, Wheel? Even P&G is now entering the mass market. Basically, in India the mass market and the rural economy are so strong that no one can ignore them. The question of perception doesn’t arise here.Emami has acquired the multi plant stem cell technology that is believed to have the potential to change the skincare industry. How are you working towards exploiting this technology?The product is being developed though I don’t want to divulge much. All I can say is that we would be coming out with the product in three months.You had acquired Pharma Derm SAE Co of Egypt. The country has going through difficult times... We are putting up a factory there where we would be producing personal and healthcare products. Egypt had recently gone though some political upheavals but we are confident that within six months we will be able to do it.How has Zandu grown post acquisition, relaunch and repackaging?The products are doing very well. Zandu balm’s sale has grown by close to 60% since we acquired it. Several new products are being developed and you will see a sea change in Zandu’s product portfolio within a year. We have appointed a former chief official of Piramal Health who is assisting in these initiatives.After Zandu, Emami has not been successful in closing any domestic acquisition... Some of the brands of Paras Pharmaceuticals have been put up for sale (by Reckitt Benckiser which bought the company last year). We might get interested in Paras’ personal care brands. As for Henkel’s brands, we didn’t go very aggressively and now it has gone to Jyothy Laboratories. But whatever brands or companies we bid for it would be fair valuation. We are very aggressive in mergers and acquisitions, but only at a reasonable price.Do home-grown brands like Vicco and Amrutanjan excite you?We have tried earlier but the owners of Vicco and Amrutanjan are not ready to sell their brands. Owners of many domestic brands which are strong in some regions in the country have this feeling that their brands may get diluted if some bigger company acquires them.You have also been looking at acquisition of foreign brands for quite some time but without much success. Is any positive development expected?Things are happening and you will see the result coming.How do you feel making a success out of a product like Fair and Handsome which caught the imagination of the entire fairness cream sector?You always work towards developing a new product and be successful and not with an objective of hurting our competitor. But when the product - a fairness cream for men — became a success, we felt great. We have innovated on that also. Our latest commercial for the product featuring Shah Rukh Khan in a setting of an akhara is targeted at the rural market, something not done before in fairness cream category.How do the multinationals, which are your competitors, take your achievements?They have responded by going to court against us. But every time they have filed cases they have lost. It gives me immense satisfaction when my competitors tried to stop us by filing cases and the losing. I am a LLB so I ensure that there is not aspect in the product or the way it is being marketed and advertised where our competitors can find a fault.Emami has been signing up Bollywood stars as brand ambassadors. But do you think the strategy still works with these celebrities appearing on television every second?With the clutter of celebrities in all media, it’s time to think of some innovative ways of using them, not in the way you are presently seeing them. We are thinking on this. Perhaps you will see in time to come how a film stars or celebrities should be used.What about foods? We are already established in edible oil. Now we have entrusted Sunil Alagh (former managing director of Britannia) to explore opportunities in the food sector. We are looking at spices, nutraceuticals, even fruit juice, ready-to-eat food. But biscuits have been ruled out as the margins are too low.

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