Godrej Consumer Product (GCPL) has announced a long term venture with possession of home and personal care brands in Indonesia, India and Africa. This merchandising campaign is looking forward to make a profit of Rs. 3,000 crore approx. Vivek Gambhir, Managing Director of GCPL mentioned that in the last few years Godrej has been able to consolidate the earlier purchases, and in the coming time are all set to conjoin with similar firms. This would push the figures to 0.8-0.9 in addition to $950 million already in the cash balance.
The last decade has seen GCPL taking over more than half a dozen companies in Africa. Brands like Rapidol (hair colour) and Kinky (hair extension) have flooded the markets. Progressively products like mosquito repellents (GoodKnight) and Cinthol have incurred most of its sales from Africa and Indonesia. Not to forget the Nigerian hair extension brands Tura , Darling, South African Frika and 75 per cent spike in Canon Chemicals. Adi Godrej, Chairperson of Godrej states that Kenya, Indonesia, Chile, Uruguay and the United Kingdom has been responsible for higher per-capita sales of the company.
The renewed focus on procurement has come from the expert opinion which sees Africa and Indonesia to get in slower pace due to weak environment. The currency rate is going down, the economies depending on oil business have been seriously effected. This slow down has coerced many unregistered companies and brands to agree for acquisition, so that they can scale up their businesses. Even though Godrej has declared an acquiring push, it denies any effort to hostile takeovers. A senior official mentioned in an Economic Times report “The group, as a policy, stays away from hostile takeovers and chooses to work together with companies”.
Other growth plans of GCPL include Nature’s Basket – a retail chain for ready-to-eat meals, herbal products, hand sanitisers, mosquito repellents and home cleaning products which come under Protekt brand. Ayurvedic products like Emami, Kesh King and HUL have plans to purchase Indulekha. Leaders like Himalaya are also in the range to complete the category. The ayurvedic segment has suprisingly grown upto 23 per cent to Rs 3,700 crore in 2015, which is faster than the FMCG market that has grown upto 6 per cent, as per the IMRB data.
BNP Paribas report claims that GCPL’s is growing fast specially under penetrated categories. It is focussing on substantial growth in the up-coming markets which will surely pay off in the future. It is cross-pollinating its commodities in other countries to reduce the time taken to bring them in the market. Since Godrej is a gamut of more than a dozen brands, companies prefer to acquire them, especially to enter newer markets or consumer categories.