Home Retail Godrej sets up M&A cell, to focus on rural markets

    Godrej sets up M&A cell, to focus on rural markets

    By  
    SHARE

    The has decided to set up a mergers and acquisitions (M&A) cell to explore opportunities in India and abroad.

    , chairman, Godrej Group, said at a recent analysts meet, “We have great opportunities in geographical expansion, in channel expansion, and then getting into other countries in neighbouring Africa. We are exploring opportunities both in India and outside. The money raised through the rights issue will be used for acquisition opportunities.”

    The company had raised Rs 400 crore through its rights issue last year.

    The move comes close on the heels of () acquiring the 50 per cent stake held by SCA Hygiene Products AB, Sweden, in its joint venture Godrej SCA Hygiene for an undisclosed amount.

    Godrej SCA Hygiene, which makes diapers and sanitary napkins, has a significant market share in Kerala and Tamil Nadu. Post-restructuring, it will become the wholly-owned subsidiary of GCPL.

    GCPL had formed a joint venture with SCA in March 2007, under which it launched a couple of products from the international partner’s stable.

    The GCPL Board has also approved acquisition of the US-based Sara Lee Corp’s 51 per cent stake in Godrej Sara Lee (GSL) following its decision to exit its household and personal care business globally.

    GSL is the market leader in household insecticides, air care and hair cream (products) in India with popular brands such as GoodKnight, JET, HIT, AmbiPur, Brylcream and Kiwi shoe polish.

    Further, GCPL intends to increase revenue from rural areas from 38 per cent to 55 per cent in the next three years by increasing the reach and distribution network substantially. The products will reach out to 50,000 villages in the next couple of years from the present 18,000 villages while the number of towns covered will double from 3,300 to almost 6,500 in a year, said Hoshedar K Press, vice-chairman, GCPL.

    On the distribution and supply chain, GCPL products are now found in three million outlets of which two lakh were added last fiscal, he added.

    The company will enhance efficiencies right through the supply chain, right across depots, distributors and retailers. It will also focus on low unit packs of Rs 5 and Rs 10 in Godrej No1, Cinthol and Fairglow.

    “We have already launched new variants in soaps and Fairglow in the Rs 5 price point,” said Press.

    GCPL plans to launch premium products to complete the product range. “We will continue to work on growing the category and will make bolder innovations in a more focused manner,” he said.

    Source: The Hindu Business Line