Business strategies of itc


Published on

Published in: Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Business strategies of itc

  1. 1. Business Strategies Definition Business Strategy The principles guiding how a business uses its resources to achieve its goals. A strategy states a businesss focus and indicates the basic steps the business will use to achieve it. The ultimate aim of any strategy is to make money, but each company takes a different (sometimes very different) approach to achieve this goal. Business strategies are widely studied and discussed in management consulting.1. A business strategy, according to Rapid Business Intelligence Success, is a business plan that takes place long-term in order to help achieve a specific goal or objective. The aim of a business strategy is to strengthen a particular business so that its performance increases and, in turn, the business becomes more profitable. Without a business strategy, a business has no guide to follow and has an increased risk of not succeeding. Significanceo A business strategy is necessary to maintain a business performance. Business strategies are motivating, informational and change-stimulating. If you arent motivated to form or complete the business strategy to see an end result, your business will most likely fail. A business strategy is also a wonderful tool to use when monitoring how well your business is doing over time and deciding the next step to take in your business in order to be successful. Functiono A business strategy is used to increase the earning potential and success of a particular business. Business strategies often have profitable results for business owners just starting out. Business strategies can range from choosing the most profitable niche for a market to successful ways business owners can promote a business. Many times, business strategies are used to improve a business or make a business better than its competitors by making use of one or more techniques.o Sponsored Links Build Your Analytics Team Ovum On the Radar Free Report Planning a Business Strategyo Like most things, business strategies require planning in order to be successful. In order to plan a business strategy, business owners should make a list of areas where their businesses need improvement and then brainstorm how their businesses can be improved. It is also beneficial to analyze competition and what other similar businesses are doing that is working for their particular market to improve their earning potential. Once a business strategy is in place, incorporate this strategy into everyday business management.
  2. 2. Benefitso Besides the earning potential related to a successful business strategy, business strategies provide businesses a chance to become popular and unique in the business market. Some business strategies also increase customer satisfaction if improvements are made. Moreover, business owners are benefited, since a successful business strategy will remove a particular danger a business may have of failing. Business strategies give business owners a valuable means of avoiding mistakes and doing things right the first time. Bad Business Strategieso Not all business strategies are effective. Some business strategies can even hurt a business if done the wrong way. For example, a well known business strategy is to promote your business by taking advantage of social networks, such as Facebook and Twitter. However, this business strategy is not effective if the business owner chooses to spam social networks when attempting to promote the business, since this will harm the business reputation and the business will not receive many customers. Sponsored Links Read more: Business Strategies Definition | definition.html#ixzz2OBInNIxN History of Marico Ltd. 1988 - The Comp. was incorporated on 13th October, under the name of Marico Foods limited It obtained the Certificate of commencement of business on 22nd November. - The Comp. is engaged in the business of manufacture & marketing of branded personal care products, edible oils, fabric care products and processed foods. The Company products are sold under the brand names Parachute, Saffola, Sweekar, Marico Hair and Care, Revive and Sil. 1989 - The name of Comp. was changed to Marico Industries Limited w.e.f. 31st October. - In December, the Comp. entered into an agreement with M/s. Rasoi Industries Limited for purchase of its unit located at M.I.D.C. Industrial Estate, Jalgaon. 1990 - The Comp. entered into a Registered Users Agreement dated 26th September, with BOIL for use of brands Parachute and Saffola for an initial period of 3 years commencing from 1st April. 1993
  3. 3. - The Comp. established a new plant at Kanjikode, Palghat District, Kerala to manufacture ParachuteCoconut Oil. This plant with capacity of 24000 tons of coconut oil per annum began commercial operationin May.- The products Parachute Coconut Oil, Saffola & Sweekar are manufactured at the Company factories.The products Marico Hair & Care, Revive Instant Starch, Parachute Amla & Parachute Herbal aremanufactured on job work basis as per the Company quality specifications & under the brand names ofCompany.- The Comp. has two SSI Units namely M/s. Amardeo Plastic Industries having its factory at Mumbai.- The SIL range of jams & food products are manufactured by Kanmoor Foods Limited [KFLs] & marketedby Company.- Saffola won the Most Outstanding `Brand of Year Award instituted by the Advertising Club of Mumbai.1994- Agreements dated 21nd February 1994 & 16th November 1995 between the Comp. & The Bombay OilIndustries limited for using the Trademark Parachute & Saffola.1995- The Comp. has acquired the Brand `SIL from KFL in March for an aggregate consideration of RupeesThree crores.1996- Memorandum of Understanding dated 2nd January, between the Company and Karvy Consultantslimited agreeing to act as Registrars to the Issue.- In March, the Comp. made a fresh issue of 10,00,000 equity shares of Rs.10/- each, at a premium ofRs.165/- per share, simultaneously with an offer for sale by promoters of 26,25,000 equity shares ofRs.10/- each, at a premium of Rs.165/- per share.- The Comp. decided to leverage on the strong equity of Parachute brand through appropriate extensions.Accordingly, `Parachute Herbal was launched.- The Total Quality Movement within the Comp. has gathered speed and now embraces virtually alllocations.- The Comp. has made major investments in information technology, a process which began four yearsago. Presently, all the establishments are covered by information technology & networked with theCorporate Office.- The Comp. has acquired a formidable reputation for its HR practices and has been recognised byNational HRD Network in the recent past.1997- Marico Industries has extended the Sweekar oil brand to introduce two new refined oils-Sweekar cottonseed oil & Sweekar mustard oil.
  4. 4. - The Comp. has set up a factory near Jalgaon to process the cotton seeds & another factory near Jaipurfor mustard oil.- The Comp. has launched branded refined mustard oil & cotton seed oil refined under its brand nameSweekar Orange.- Marico Industries has been one of few success stories in the fast-moving consumer goods segment.- The Comp. has announced the extension of Parachute brand name to other products in the hair caresegment, thus making it an umbrella brand.- Marico Industries has launched three new variants of coconut oil - light oil, nutra sheen liquid & nutrasheen creme-under the brand name Parachute.- Marico Industries Limited, the Rs. 400 crore consumer goods company has been selected as a TopPerforming Global Growth Comp. from India by the World Economic Forum, New Delhi.1998- The Comp. was originally a join venture between a Lever group company & Nissin of Japan, & itsproducts were distributed through HLL channels.- Marico Industries Ltd has taken the lead in launching a refined oil in the soya segment with a newvariant called Sweekar Refined Soya Oil.- The Comp. has recently launched a new variant in Postman called Sona, which is a sunflower oil.- MIL launched an innovative fabric care product named Revive ColourFix which helps to fix the colour oncotton fabrics.- The Comp. has recently extended the brand equity of Parachute to coconut-based hair groomingproducts like Parachute Lite & Parachute Nutra-Sheen. The Comp. is also considering testing Parachutebranded products in international markets like Europe & America.1999- Marico Industries Ltd is focussing on relaunching its SIL brands in its `healthcare business, after asuccessful repositioning of its Saffola & Sweekar brand.- The Comp. is planning to introduce a range of vegetable soups.- The Comp. is planning to set up a wholly-owned subsidiary in Bangladesh shortly.- Marico Industries [Maricos] & The Bombay Oil Industries [BOILs] have reached an understanding interms of which the brands, Parachute and Saffola are being assigned to Marico.- ICRA has retained the `A1+ rating for Rs. 7.5-crore commercial paper programme of company.- The Comp. is planning to set up a local manufacturing unit is several other SAARC countries.2000
  5. 5. - The Comp. launched Parachute Dandruff Solution Coconut Hair Oil in Calcutta, the first oil to combinecoconut oil with antidandruff properties in a single hair oil.- The Comp. has launched the branded coconut oil in a tamper proof seal pack with a flip top cap.- Marico Industries limited has a tied up with the International Association of Trichologists [IATs], a non-profit organisation based in Australia.2001- Marico Industries has launched the Revive Anti-Bacteria starch.2002-Marico Industries Ltd has informed BSE that the Board approved the Issue of bonus redeemablepreference shares of aggregate face value of Rs 290 million. Ratio -- 1:1 on equity enhanced after bonusissue of equity shares made by Board on April 18, 2002 & approved by shareholders on July 18, 2002.The rate of dividend is 8% p.a.Increase in authorised share capital of Comp. from Rs 300 million to Rs600 million.2003-Marico Industries Ltd have appointed Erehwon consultancy firm for initiatives of innovation in marketing& management.-Marico Industries have acquired a controlling equity interest in Sundari LLC.2004-Marico Industries popular edible oil brand Saffola launches a fresh advertising campaign. Thecampaign by Grey Worldwide has a new tagline, Aaj se jeene ka andaaz sudhariye [Improve your lifestyletodays], urges every Indian to take up healthy lifestyle. Earlier Saffola campaign used the tag line -Saffola Swasth ParivaarKe Dil Ki Dhadkan-High Court of Judicature at Bombay approves the Scheme of Amalgamation of Anandita Arnav Tradingand Investment Private Ltd, Madhav Nandini Trading and Investment Private Ltd, Rajvi Rishabh Tradingand Investment Private Ltd & Rishabh Harsh Trading and Investment Private Ltd with Marico IndustriesLtd on February 12, 2004-Announces 1:1 bonus issue- Marico Industries launches Saffola Gold, a blend of Ricebran & Kardi oils in a 70:30 ratio, which hasdual benefits of lowering cholesterol & enabling food cooked in it to absorb lesser oil-Marico industries has announced its foray into the beauty products segment with the launch of Silk-n-Shine, a post-wash haircare product2006-Marico acquires HLL`s Nihar for Rs 216 cr2007
  6. 6. -Marico Ltd has appointed Mr. Anand Kripalu as an Additional Non-Executive Director on the Board ofDirectors of Company.- The Comp. has splits its face value from Rs.10/- to Rs.1/-.2008-Marico Limited has appointed Ms. Rachana Lodaya- Legal Manager, as Comp. Secretary & Complianceofficer of Company, with effect from August 01, 2008.< Manhunt Deodorant.. Marlboro.. >Tweet3 MaricoParent Company MaricoCategory Consumer ProductsSector FMCGTagline/ Slogan Be more everydayUSP 1 out of 3 Indians uses a Marico product STPSegment Products and services for daily needsTarget Group Every Indian household especially the middle classPositioning With Marico, your every single day needs are fulfilled Product Portfolio Consumer Products 1. Parachute 2.Hair & Care 3. Mediker 4.ReviveBrands 5. Kaya Skin Clinic
  7. 7. SWOT Analysis 1. Excellent distribution network and product availability 2. The product portfolio of Marico has brands covering Edible Oil, Hair Oils, Skin Care, Fabric Care, etc. 3. Popular brands, good brand visibility and excellent advertising of products has led to strong brand loyalty 4. Experience management and good R&D 5. Marico is present in more than 25 countries across Asia and the African continent. 6. Marico reaches over 2.5 million outlets and around 130 millionStrength customers 1. Market share is limited due to presence of other strong FMCG brands 2. Marico products has stiff competition from big domestic playersWeakness and international brands 1. Tap rural markets and increase penetration in urban areas 2.Mergers and acquisitions to strengthen the brandOpportunity 3.Increasing purchasing power of people thereby increasing demand 1. Intense and increasing competition amongst other FMCG companies 2.FDI in retail thereby allowing international brandsThreats 3. Competition from unbranded and local products Competition 1. ITC 2. LOréal 3. Nirma Ltd 4. HUL 5. Colgate-Palmolive 6. Procter and GambleCompetitors 7. Dabur
  8. 8. Turnaround strategy: Smaller stores are planned under Kaya with more focus on products than services.By spinning off its skin care services business, Marico hopes to bring back fast growth toits FMCG business.February 10, 2013:Harsh Mariwala, Chairman and Managing Director of consumer goods company Marico Ltd,describes his penchant for taking business risks as removing the „escape buttons‟.Once in a venture, there are no exits. At Marico, he believes in celebrating failures and actually handsout increments to managers who have handled innovative businesses that have failed. The samebenchmark could be in use for the Kaya skincare business that was recently spun off as a subsidiary.Keen to enter the retail business a decade ago, the entrepreneur decided to stay away from theregular modern retail business. Instead, he went niche with the concept of skin-care solution clinicsunder the Kaya brand.The year was 2003 when Marico was a cash-rich, debt-free company and Mariwala could afford totake risks. It was unconventional for an FMCG company to foray into retail services then as it wasunrelated to its original line of business.“As there was a lot of interest in retail during that time, we decided to try out niche retail in the areaof dermatology as the cost of hiring a dermatologist would be much cheaper in India. After somequick market research, we decided to set up a single incubation cell with a manager who wouldreport to me directly and head a small, entrepreneurial team,‟‟ reminisces Mariwala, quite aware atthat time that it was going to be a „long battle‟ in the retail business.
  9. 9. RESTRUCTURINGWith the help of his friend Asif Adil (former Diageo MD) and his New Jersey-based financial andadvisory services company, Marico floated Kaya Skin Care Solutions with 24 per cent stake held byAdil (subsequently bought out). Today, after a decade, the FMCG major is hiving off Kaya as asubsidiary and listing it as Marico Kaya Enterprises (MaKe) to give a fresh impetus to the „yet-to-be-profitable‟ retail business.The restructuring has been done to consolidate its FMCG business by merging its consumer productand the international businesses while keeping its skin care business as an independent entity, whichwill take effect from April 1.Today, Kaya contributes seven per cent to Marico‟s Rs 4,000-crore turnover. Kaya reported profits inthe September quarter of this financial year after a loss in the last financial year.It has been steadily increasing its offerings under skin care solutions and technology-led cosmeticdermatological services and products across 107 clinics, of which 82 are in India, and the restoverseas. It has also acquired a profitable company in Singapore — Derma Rx, and has four DermaRx Clinics in Singapore and Malaysia.„NOT A MISTAKE‟“The skin care solution was a different business for us and we don‟t think we made a mistake byentering it. We did go through the learning curve and the insight we got was that we ramped up toofast. There will continue to be challenges with competition from smaller players with no overheadcosts,‟‟ explains Mariwala.In the past decade, Marico‟s Kaya business has witnessed high-profile employee exits, including thatof an MD. “Kaya was being clouded by Marico‟s policies and did not have the required retail mindsetfor the business. It was not being run as a retail company, coming as it did from an FMCGbackground,‟‟ recalls an ex-employee of Kaya.“After the announcement of Kaya‟s demerger, Marico‟s stock has been doing well and the return onequity will improve. While the focus would go back to the FMCG business, there will not be anymajor difference in the way the company is functioning,” says Abneesh Roy, Associate Director,Edelweiss Capital.After the demerger, Marico shareholders will be issued one share of Marico Kaya Enterprises with aface value of Rs 10 each to be issued at a premium of Rs 200 for every 50 shares of Marico with a facevalue of Re 1 each.As Milind Sarwate, Group CFO, Marico, explains: “It has been a decade and Kaya did look atexpanding operations but it did not meet our expectations. We would be partitioning the balancesheet of the two companies within the group and there will be no cross-holding between them.”With this, Marico Kaya Enterprises will not carry significant debt on its balance sheet and will startlife on a clean slate. Kaya‟s losses will also get transferred without being a drag on Marico‟sprofitability.While Kaya becomes a retail-focused entity, Marico will get a chance to consolidate its FMCGbusiness in India and abroad.
  10. 10. “The demerger will facilitate the consolidation of Marico‟s FMCG business in India and overseas.Now that the international FMCG business has achieved certain scale, we see synergistic benefitswith the Indian business.“This has become more pronounced after the recent acquisition of the youth portfolio from ReckittBenckiser. There can be benefits in areas such as buying of raw materials and packing materials andcross-pollination of portfolio,‟‟ says Mariwala. (Exactly a year ago, Marico bought the consumerbrands business from Reckitt, which in turn had acquired it from Paras. These include brands suchas Set Wet and Livon, among others).STRATEGIC INVESTORSAs for the Kaya business, it is likely to look at strategic investors to take the business forward as in itsinitial days when the business was started in 2003.“We are open to inputs, financial or strategic, for growing the Kaya business. But investment in Kayawill continue. We are eyeing break-even in a couple of years but are open to resetting the targetdepending upon the long-term needs of the business,‟‟ he adds.But it is the long gestation period that took its toll on Marico. As Sunil Alagh of SKA Advisors, anindependent marketing consultancy, says, “While Marico made no error of judgment entering theskin care business, it was the long gestation period which pulled down the bottomline of Marico‟score FMCG business. The decision to demerge is, therefore, a prudent one as it will lead to greaterfocus on the skin care business by a different team, and also provide an option of remerging, oncethis business becomes profitable.”Marico is now on its way to proving that it can make a success of its retail business.As Mariwala says, “After all it was our FMCG roots which provided a stronger foundation in theconsumer insights area. It was this self-belief on which we entered the skin care business. I do notsee any room for self-doubt. It is a matter of tweaking the execution and hopefully the newentrepreneurial way of running the business will yield better results.‟‟After all, Mariwala believes in removing all the „escape buttons‟ when in a new line of business.More focus on productsIn spite of Kaya‟s top-line growing, the same stores sales growth had slowed down to single digits.But now with smaller stores planned under Kaya with focus more on products than services, aturnaround in the skin care business may be imminent.Five prototypes of Kaya Skin Bars are being planned in cities such as Delhi and Bangalore and thesewould stock products rather than offer skin care services. The Kaya range is also being offered atcounters in Lifestyle stores.“As we grow in the skin care business, we expect Kaya products to contribute almost 60 per cent ofthe turnover while the balance would come from services,‟‟ says Ajay Pahwa, CEO, who will move outof Kaya by March-end when Vijay Subramaniam takes over.
  11. 11. The Kaya brand would be adding 18 new skin care products and increasing the number of stockkeeping units to 54 with its extended Derma Rx range, which is a premium one, leading to highermargins.A recent report on the Indian consumer by Deutsche Bank states “For Kaya there is going to be lightat the end of the tunnel. The format may be some time away from profitability but the business isshowing strong growth. The focus on product sales has led to higher footfall through a shift from„cure‟ to „prevention and cure‟ positioning. The smaller store format and the Derma Rx acquisitionare going to be the key reasons for the turnaround. The revenue per quarter of about Rs 40 crore hasjumped to Rs 91.5 crore in the second quarter of 2013.‟‟ Strategy at MaricoTejas: In these times when the buzz in retail is about countries like India, China and Vietnam, whatare the specific reasons why Marico is acquiring in countries like South Africa, Egypt andBangladesh? HM: I think the primary driver for strategy at our end is growth. We need to drive growth and growth from wherever growth can come in- be it India or other countries. Our strategy of going international is to be in markets where can we add value and also those markets in which we can emerge as market leaders. This value can be in terms of brand building, distribution and so on. There is a whole rationale of going into these countries. It is because we see ourselves capable of becoming market leaders and there are opportunities to leverage our strengths. What you do need to realize here is that global expansion is not being done at the cost of Indian business. There is a clear organization structure, a clear demarcation in terms of responsibility, a CEO of domestic business and a CEO of international business. So there is no conflict of interest in this case in the sense that if we are doing one it does not mean that we cannot do the other.Tejas: You new initiative, Kaya, is one of the very few examples where an FMCG player is going intosolutions business. Why has Marico done this? Do you think this trend will continue? HM: You are right. I think it is one of the only examples that I know of where a product player has gone into what we call solutions. While I am not aware of the strategy of other players we will be involved in going more and more towards solutions. There is a very strong reason for it. It did happen a little bit by chance also but there was always a desire to go into solutions. If you have a problem of your skin say pimples you will just go buy a cream. As opposed to this when you go to Kaya you will get customized treatment by the doctor then you will have services, products and a special recommended diet. The whole 360 degree approach to the skin is far more effective that just using a product. So the belief is that if you need to address issue of skin or whatever else you are doing - hair wellness etc., you can address it far more effectively through a 360 degree approach that is customized to the customers needs. Another reason was that we wanted to enter the skin space and we felt that if we only went through the product route it will be difficult for us to become market leaders in this highly competitive market. So we can actually take it on through a service route and create a brand. And then we also have products under Kaya.Core Competence:Core Competence Market leadership Wide distribution channel- Access to rural market Converted commodity intoproduct Created new niche categories for growth- E.g. Revive and Mediker
  12. 12. Achievements:Achievements Marico’s “ Saffola Heart Day ” campaign won a Bronze at Asia Pacific Effie, Singapore 2008 Kaya -Best retailer in the Beauty and Fitness category, India Retail Forum, 2007 One of India’s 10 Best Marketers Brandleadership award at the Brand Summit, 2006Marico to sell stake in SundariTNN Apr 23, 2009, 01.57am ISTMUMBAI: Marico, which owns leading brands like Parachute and Saffola, is divesting itsentire stake in wholly-owned subsidiary Sundari LLC, which is engaged in themanufacturing and marketing of skincare cosmetics and accessories, primarily in the USand Europe.The company said it has agreed to sell its stake in Sundari LLC to US-based WellnessSystems (WS), for an undisclosed amount. Wellness Systems is a limited liability companypromoted by two of Marico Groups senior managers who were in charge of the Sundaribusiness.A majority of Sundaris revenue is generated from B2B sales to spas located within luxuryresorts and hotels globally. Marico had acquired a controlling interest in Sundari LLC in2003, and has since then made investments to grow the business.However, considering that Sundari constituted only a small share of Maricos revenue, thedivestment is a logical part of Maricos global strategy. The companys geographic focus hascome increasingly from Asia and Africa.Marico recorded a turnover of Rs 2,388 crore for the year-ended March 31, 2009 (FY09), agrowth of 25% over FY08. Almost the entire growth during the year was attributable toorganic growth, of which volume growth comprised 12%.During FY08, Marico made a one-time profit of Rs 10.6 crore on the sale of its Sil business.Moreover, in FY09, the company has booked a one-time extraordinary loss of Rs 15.03 croreon the sale of its Sundari business. Profit after tax was Rs 188.7 crore, a growth of 11.6%over FY08. However, the growth, net of extraordinary items, was 15.7%.The company said it has weathered the economic slowdown leveraging its robust flagshipbrands Parachute and Saffola, both growing in volume in double digits.HC slaps fine on MaricoPTI May 21, 2008, 02.30am ISTKOLKATA: The Calcutta High Court has asked FMCG company Marico Industries to pay Rs52,000 to rival Dabur after dismissing a petition of the Mumbai-based company seeking the
  13. 13. latter to stop advertising campaign of its product Vatika hair oil. "The plaintiff (Marico)would pay costs assessed at Rs 52,000 to the defendant (Dabur)," said Justice SanjibBanerjee.Marico sells processed food unitBloomberg Mar 12, 2008, 12.00am ISTMarico, the countrys biggest maker of coconut hair oil, agreed to sell its processed foodsdivision Sil, to Denmarks Good Food Group for an undisclosed sum on Tuesday.Good Foods Scandic Food India unit will retain the employees at Sil, Mumbai-based Maricosaid in an e-mailed statement on Tuesday.The processed foods business makes jams, sauces, baked beans, Chinese vinegar and otherproducts.Marico rose 4.7% to Rs 65.3 on the Bombay Stock Exchange on Tuesday.The stock has fallen 4.9% this year, compared with Sensexs 21% decline.Marico buys Enaleni arm for Rs 52crTNN Nov 1, 2007, 12.43am ISTMUMBAI: Marico on Wednesday announced the acquisition of the consumer division of South AfricasEnaleni Pharmaceuticals for SA Rand (ZAR) 92.8 million (about Rs 52 cr).Marico acquired this business through purchase of 100% shares in Enaleni Pharmaceuticals ConsumerDivision (EPCD), an Enaleni subsidiary. The company plans to finance the acquisition through a US dollardenominated term loan.ToI was the first to report about Maricos interest in Enalenis consumer division. It had, on October 2,reported that Marico had emerged front-runner in the race to acquire the business from Enaleni. Maricoclinched this deal in a competitive bidding process, wherein some South African companies and IndiasGodrej group were the interested parties.The Durban-based EPCD is present across hair care segments. Its current annualised turnover is aboutZAR 95 million and it operates three leading brands—Caivil in premium ethnic hair care, Black Chic inVFM hair care, Hercules in OTC Health Care.On the acquisition, Marico Group chairman Harsh Mariwala said: "It provides us an opportunity toparticipate in the rapidly growing ethnic consumer products market in South Africa. It helps us extend theMarico footprint to a new geography with potential, thus taking us a step further towards becoming aglobal player in beauty and wellness."The market for ethnic hair care and relevant OTC healthcare products in South Africa is estimated to be inthe region of ZAR 1.1 billion (about Rs 600 crore), growing at over 20%. EPCDs market share in relevantsegments of hair care is about 5-6%, going up to 9-10% in OTC segments.
  14. 14. Marico leads race for South Africas EnaleniNamrata Singh, TNN Oct 2, 2007, 01.19am ISTMUMBAI: Marico is said to have emerged the front runner in the race to acquire the consumer productsdivision of South African company Enaleni Pharmaceuticals.Sources said Maricos bid had been shortlisted by Enaleni because it had prima facie outbid othercompanies in the fray, including the Godrej group. Among other South African companies in the race wasAMKA Products.While Marico CMD Harsh Mariwala declined to comment, sources said Maricos bid stands at aroundRand 100 million ($15 million) for Enalenis consumer business. Enaleni, said sources, expects bids inexcess of Rand 60-70 million(around $10 million) for the business.Though the bidding process has been on for almost a month now, Enaleni is expected to take a whilebefore finalising the winning bid.If this goes through, it will be Maricos third acquisition in Africa. The maker of Saffola edible oil andParachute hair oil had earlier acquired two hair care brands in Egypt — Fiancee and HairCode.TOI had reported in its edition dated September 14, that Marico had joined the race to acquire theconsumer business of Enaleni. On September 4, TOI had reported about Godrej Consumer Productsinitiating talks to acquire Enalenis consumer business.Enaleni has a market capitalisation of approximately 1.5 billion rands. It is one of the top 10 pharmacompanies in South Africa.Marico joins race for SAs EnaleniTNN Sep 14, 2007, 12.20am ISTMUMBAI: The race to acquire consumer and vitality business of South Africa-based EnaleniPharmaceuticals is hotting up with more players joining the bidding process.It is learnt from sources that homegrown FMCG major Marico, along with two other South Africancompanies, including a local firm AMKA Products, is throwing its hat in the ring. This is in addition to thebid being submitted by Godrej group company, Godrej Consumer Products (GCPL).TOI had reported on September 4 that GCPL had initiated talks to acquire the consumer productsbusiness of the South African pharmaceuticals company.According to sources, with the bidding process likely to close this week, the companies are said to beconsidering putting in aggressive bids. Marico CMD Harsh Mairwala declined to comment.Mariwala sells stake in MaricoTNN Jan 24, 2007, 01.25am ISTMUMBAI: The Mariwala family — promoters of the closely held Rs 1,150 crore FMCG company Marico —has diluted its holding in the company by a little over 3% to 63.5% in the December quarter.
  15. 15. CMD Harsh Mariwalas holding, which forms the bulk of the promoter holding in Marico, has declinedmarginally during the quarter to 51.7%. The reason behind the decline in promoters holding in theDecember quarter is the QIP issue to non-promoters.Marico had privately placed 29 lakh equity shares through the QIP route to raise Rs 151 crore. This alsoraised Maricos equity share capital to Rs 60.9 crore and brought on board a fresh cross section of FIIsand Mutual Funds.The FII holding in Marico has risen to 16.7% in the December quarter from 13.3% in the Septemberquarter. Given that the company was active on the acquisitions front, the QIP issue was undertaken toraise debt at a short notice.Close on the heels of acquiring Fiancee of Egypt, Marico acquired HairCode, a haircare brand in Egypt, inthe December quarter. In order to bring in additional interest from retail investors and contributetowards enhancement in the liquidity in the Marico scrip on stock exchanges, the board of the companyhas approved the sub-division of the nominal value of each equity share of the company from Rs 10 into10 equity shares of nominal value of Re 1 each.Adani Wilmar eyes Marico brand SweekarNamrata Singh, TNN Jan 3, 2007, 12.53am ISTMUMBAI: Adani Wilmar, the 50:50 joint venture between the Adani group and Wilmar Holdings ofSingapore, is said to be exploring the option of acquiring Maricos national refined sunflower oilbrand —Sweekar.According to industry sources, Adani Wilmar has been approached by merchant bankers and the jointventure company is not closed to the idea of acquiring brands even as it charts its organic growth strategywith leading brand Fortune refined edible oil.When queried about its interest in Sweekar, Adani Wilmar assistant VP (sales and marketing) AngshuMallick told TOI: "We will explore it."He said that the company was not averse to buying any brand, but it will have to first ascertain whetherthe brand has good synergistic fit in the companys portfolio and the markets it operates in.Fortune, which is present as a refined soyabean oil, sunflower oil, groundnut oil and mustard oil, is said tohave a market share of 18% in the entire edible oil market.Sweekar contributes around 8% to Maricos turnover of Rs 1,000-plus crore, which makes it a Rs 80 crorebrand. Industry analysts peg Sweekars valuation at anywhere between Rs 100-130 crore.Besides Fortune, Adani Wilmar also has in its kitty brands like Raag (soyabean and mustard oil) andJubilee refined oil.In a scenario where companies like Hindustan Lever and ITC have exited the low-margin edible oilbusiness, Adani Wilmars edible oil business is said to be driven mainly by large volumes.Meanwhile, Maricos reasoning behind keeping Sweekar "on float" stems from the fact that the branddelivers low margins and is a drag on its overall margins. Marico is thus focusing on obtaining certainminimum margin from Sweekar and, if required, it will sacrifice volume growth for that reason.
  16. 16. Marico CFO Milind Sarwate had earlier told TOI that divestment would be only one of the various ways inwhich one could deal with low focus brands. The Rs 17,000 crore Adani group is one of the fastest growingcorporate houses with business interests in ports, trading, BPO and retail among others.Marico to acquire HairCodeTNN Dec 21, 2006, 12.47am ISTMUMBAI: Close on the heels of acquiring Fiancie, Marico Ltd has announced a strategicalliance with the Cairo-based Pyramids group for acquiring HairCode, a leading haircarebrand in Egypt.The alliance, for an undisclosed consideration, envisages for Marico, direct investment in acompany with manufacturing facilities in Egypt, apart from the acquisition of the brandHairCode. The Pyramids Group will continue to distribute the brand for the medium termand has agreed for a non-compete in certain segments.The alliance parties expect that they can grow the brands turnover from its current base toover Egyptian Pounds 50 million in the next financial year. Marico had recently raised Rs150 crore through the QIP (qualified institutional placement) route. This was to enable thecompany to raise debt at a short notice to fund any acquisition opportunity by restoring thebalance in its financial gearing.Marico CFO Milind Sarwate said:"This alliance makes Egypt an important geographicalsegment of Maricos operations. This helps us in leveraging the resources deployed in thecountry optimally. Egypt is a profitable market and we have made an entry into the countryat the right multiples."Marico buys Egyptian co FiancieTNN Sep 13, 2006, 11.43pm ISTMUMBAI: The Rs 1,150 crore Marico group on Wednesday acquired Egypts hair-care market leader,Fiancie, from Ready group for an undisclosed consideration.This is Maricos fifth acquisition in 18 months. It not only marks the companys direct entry into Egypt,but also provides a fillip to its international operations.Maricos international business turnover during FY 2006 was Rs 117 crore — about 10% of the groupsrevenue. Fiancie range includes value-for-money creams and hair gels.As a market leader, Fiancie commands a share of 20% of the Egyptian pound 215 million (Rs 170 crore)hair care market.
  17. 17. The deal gives Marico access to the manufacturing and sales infrastructure for the brand, which has beendeveloped by the Ready group over the last 15 years.Marico group chairman Harsh Mariwala, said: "This footprint in Egypt will help us widen our strides inthe international hair care market."With Fiancie under its belt, Marico could target a turnover in the range of Rs 50-55 crore from Egyptduring the next fiscal.The consideration for the deal will be paid out over the next six months in two tranches, based on brandsperformance.Marico, using a short-term loan facility, has already paid one out. Marico would now take a fresh look atits financing pattern and would modulate the debt and equity mix suitably.The meaning in Maricos methodsSaugata Gupta, CEO (Consumer Products), on buying and shedding brands, corecompetence and consumer insight.Like many of its peers in the consumer goods industry, Marico, maker of blockbuster brands suchas Saffola and Parachute, has been on an acquisition binge abroad, taking over brands in SouthAfrica and South-East Asia. In this interview at the Marico office in Bandra, Mumbai, SaugataGupta, CEO, Consumer Products, Marico Ltd, discussed the rationale behind these acquisitions,Maricos growth strategy, commodity price fluctuations and the impact on its brands,diversifications and much else. Excerpts:Marico has seen a spate of acquisitions abroad. Are you looking at bringing thosebrands into the country?Theres a huge threshold level of investment in creating a brand. To an Indian consumer, whateverits called doesnt matter, its new anyway. What it has done is given us access to certain productcategories (in male grooming) and should we decide to participate in the category, it gives us accessto technology and shared sourcing. Common distribution, media footprint and consumers determinea brand launch. But, I dont think we have acquired scale right now.Is this a strategy that other Indian FMCG firms are pursuing? Acquiring companies inAfrica and South-East Asia? Does that insulate them from Indian competitivepressures?All of us are looking at multiple pillars of growth. If you look at Africa, there are lots of similarities.Category penetration is low, the scope for potential growth, also, its a complex market; one of thecompetencies of Indian managers is to work in a slightly chaotic environment. The distributionsystem is still not organised. Also, the market is still not competitive. These are the factors drivingacquisitions. Its still not a focus market for many MNCs, but a focus market for Indian companies.While complexity is there, the relative competitive intensity being low, were investing ahead of thecurve.You have bought brands in categories in which you are not present in India, right?
  18. 18. Essentially its in nourishment and styling. In the case of Vietnam, there are shampoos and gels; inSouth Africa, its a lot of ethnic hair care products. Here we have a wider range and moresophisticated products, so there is obviously an opportunity.If you do bring in products, would they be under the Parachute brand, where youalready have male grooming products, or a new brand?That will depend on the size of the opportunity. For me, it makes strategic sense if the existing powerbrands are stretched to the extent possible.What about taking your brands to those markets?Parachute is already in the Middle East market. Again, its the same thing, do you want to use anexisting brand name and stretch it? For example, we have Code 10 in the South-East Asian markets,which we bought from Colgate, it is available in surrounding markets apart from Malaysia. I thinkwhat is interesting is tech formats and category knowledge that will help, not necessarily the brandtransfer. Our approach is essentially market-forward and not necessarily category-forward. But,having said that we have a method by which we focus on certain categories. While we have beendefining beauty and wellness, we are ensuring that we are getting critical mass in that.What about the other thrust area for you, functional foods? Youlaunched attaadditives earlier?Yes, we launched oats, which is doing well. Atta additives is small, but we are serious about foodsand are looking at other stuff in health foods. You will see some more this year.All your forays in food will be under the Saffola franchise?Health food will be under Saffola. I dont see Saffola getting into indulgence, but we will get Saffolainto areas where taste and family values are involved.You said you would look at products that are in the ready-to-cook area, not so muchready-to-eat?I was talking in general about the market, not particularly about Marico. In India, I dont see RTEproducts having a big market, because there is still a concept of „fresh, theres labour available andthe housewife would still like to prepare the food. Now, because of time and convenience, what shedoesnt like is negative labour, it could be cutting vegetables, preparing a masala, theres a hugemarket for intermediate foods. For example, the breakfast category has grown on the health andconvenience plank. Theres an increase in double-income families and people are time-poor in themorning. You can have help cook a meal later in the day, but you wont have help cooking breakfast.Talking generically, thats why the breakfast category has grown.Has Maricos attempt been to reduce the dependence on the commodity cycle? Yousold Sweekar, but Parachute too remains prone to these cycles, doesnt it?There is a difference between Parachute and Sweekar. Parachute is a strong brand and can commanda premium, there would be some fluctuations in margins but our ability to pass on to the consumer isreasonably high. What is most critical is to provide certain values to consumers, long-term benefits,and not look at short-term profits. If there is commodity inflation, we need not pass on everything tothe consumer. Parachute is a far stronger brand. Sweekar was different — it was a combination of
  19. 19. two things: One, we didnt see a huge growth opportunity. It was a drag on our bottomline andgrowth. In edible oil there are only two business models: extremely high levels of volume andeconomies of scale, like what Fortune has achieved. But, the other is the Saffola model, which is astrong brand and has the ability to command a premium. So you have to continuously innovate. Ifyoure in the middle, you are stuck, you are neither a volume player or a premium one. Sweekar, wewere looking out for buyers for a long time. At the end of the day, we were ensuring that in the last 3-4 years, we were maintaining the brand value, not destroying it and it contributed 6-7 per cent of ourrevenues. Obviously, there is a right time when we got out of it. At no point was there desperation tosell.You are not showing an aversion to buying or selling brands — youve acquired manybut also sold brands such as Sil and Sweekar?The reason is that Sil didnt give us strategic fit at that point of time.But, werent processed foods the way to go? And Sil as a brand had gained sometraction?We have said that we will be in the beauty and wellness space. Apart from that, Sil was a marginalplayer. If you dont have a certain scale or brand investments, you have to make choices. One of thethings we did in the last two years, which is beginning to help us, is focus. We were chasing too manysmall things and too many initiatives across the organisation. One of the things we decided was tohave a „stop doing list! Even the brands which we are supporting or putting in our investments — wehad a few big bets, and are persisting with it. Opening up multiple channels, obviously the escapebutton is up. Thats one key strategic shift weve done and weve seen results and will continue to doso.The mistakes people make, if you look at a growing market such as India, you will come up with thesame list of categories which are attractive. What is critical for any organisation is the ability to winin that category and that happens when you have shared customers and supply chain. People dontlook at competencies. One of the reasons we withdrew this brand called Sparsh … the product waswonderful but we didnt have a right to win because for its distribution, the key influencers werepaediatricians and mothers, but our target group did not have shared consumers. The mother wantsa safe product, she does not want to experiment.For example, I have about 25 lakh Saffola households. Now, if I can cross-sell even to 10 per cent ofthis, I have a Rs 250-crore business. We have power brands and a set of loyal customers. The extentof extensions possible, that we need to see.Yes, we have to reduce our dependence on commodities but that doesnt mean I can get into everycategory which looks attractive. We need the entire competencies across. Many companies failbecause they think they have been successful in one category, they can move on to others without thereal ability to win.So, a lot to be said for C.K. Prahalad and his core competency concept?A lot of companies falter in their growth; any sector which has heady growth, process and capabilityfollows that growth. But in a sector which is reasonably stable, process and ability should leadgrowth, otherwise, growth falters because of a lack of processes. So, they are critical. For us, the Indiabusiness is Rs 2,000 crore, from 2003, our journey has been upward from Rs 500 crore, we had tohave the next level of organisational capability to drive upwards. We believe a strong foundation is
  20. 20. required for the next level of growth. Culturally, we prefer doing and talking! Thats why we say weare boringly consistent, but then we are growing at 20 per CAGR. The exciting news is less, but thatsokay, as long as the pace of growth is good. The focus is something we believe in.What about growth in the hair oil category? Is it set for a slowdown as consumers cutback on the practice of oiling their hair?If you look at the value-added category of hair oil, in certain top-end markets there is a reduction infrequency, but if you really look at it, as a category it has grown the same way / rate as any otherpersonal care category. People have an inherent belief in the nourishment category. A lot of usagehas moved from post- to pre-wash. This is something which we are cognisant of and therefore ourendeavour is to improve benefits. Specifically, for hair fall, weve introduced a product that is doingwell in the South, Parachute Advansed for hairfall; developed along with the Arya Vaidya Sala.Marico to demerge its services business Kaya into aseparate listed company, this move can help improvevaluationsET Bureau Jan 8, 2013, 04.00AM IST(The move will also help centralise…)MUMBAI: Packaged consumer goods firm Marico plans to demerge its services business Kaya into aseparate listed firm in a move that could help improve valuations of the parent company that has beenweighed down by the weak performance of its services arm."Kaya requires a completely different mindset to grow. So we have taken off the Marico hat from Kayaand unshackled it from the Marico rules," Harsh Mariwala, chairman at Marico, said. "It will have thewealth creation opportunities present in Marico and help establish an entrepreneurial culture that will drivegrowth."The move will also help centralise the leadership structure and offer different career paths and largerroles to the Marico talent pipeline, Mariwala said. Saugata Gupta, who currently heads domesticconsumer business, will lead the overall FMCG firm as CEO, while international business head VijaySubramaniam will take over as CEO of Kaya, effective April 1.Marico Kaya will be listed separately on the Bombay Stock Exchange and the National Stock Exchangeand will have its own board of directors distinct from Maricos board. The maker of Saffola and Parachuteoil will also combine its consumer products business and international business group for operational costbenefits. Analysts consider it a positive move for investors who have been raising concerns about Kayasbusiness model for some time now."There were some reservations from minority investors on Kayas performance for the last 2-3 years andsplitting the business should help Maricos valuations," Nitin Mathur, consumer research analyst atEspirito Santo Securities, said. "However, re-rating of the stock will happen only if on-ground investments in terms of advertising or marketing will be accounted for separately," he added.A decade-old Kaya, which offers skincare solutions through 106 clinics, contributed around 7% toMaricos consolidated revenue of .`4,000 crore in 2011-12, but had a loss of Rs 29.1crore at the EBITlevel. Company officials said there were strong cultural differences between Marico and Kaya that limitedthe growth prospects for Kaya.
  21. 21. "Kaya is a feminine business; 85% of Maricos employees are male, which created a macho system thatdid not understand the requirements of Kaya where 85% of employees are women," Milind Sarwate, CFOat Marico, said. Officials also said the company is also open to the possibilities of roping in astrategic private equity player into Kaya once its growth plans are in place.While Marico slowed down Kayas expansion in the past two years, the services arm turned in a profit ofRs5.7 crore in the second quarter ended September, but is still a loss making business at an overall level.However, the management is optimistic on its turnaround plans. Since the last few months, Kaya clinicshave been selling high-margin products from the portfolio of its acquired firm DermaRx, taking the retailcontribution to over 20%. Cost rationalisation through smaller stores and affordable services, along withincreased focus on high-margin Derma Rx product sales via clinics, has also helped its same-store salesgrowth over the past eight quarters.Marico restructures business, Kaya to be demergedMumbai-headquartered Marico Ltd has initiated a restructuring exercise, which will see the demerger of its skinsolutions division Kaya into a separate listed company called Marico Kaya Enterprises (MaKE). The restructuring iseffective April 1 and the new company, MaKe, will be listed on the bourses by June-July this year, said MilindSarwate, chief of finance, human resources and strategy, Marico.Kaya’s incumbent Chief Executive Officer Ajay Pahwa will make way for Vijay Subramaniam, the internationalbusiness head at Marico, who will be the new CEO of MaKe. Saugata Gupta, currently CEO of the domesticconsumer products division at Marico, will be the CEO of the consolidated fast-moving consumer goods (FMCG)business, which will include both local and international operations. He will continue to report to Marico’s Chairmanand Managing Director Harsh Mariwala. “The skin solutions division is a separate business from the consumerproducts division and it was time it got focused attention," said Sarwate. “The consolidation of the domestic andinternational consumer products divisions will help in driving synergies," he added.Kaya contributes seven per cent to Marico’s Rs 4,000-crore top line, but has been a drain on the company’s bottomline, incurring a loss of Rs 29.10 crore at profit before interest and tax (PBIT) level in the last financial year. Marico’score FMCG business, on the other hand, has faced some pressure in recent quarters on account of a slowdown indiscretionary spends. This has been visible in brands such as Saffola, one of Marico’s key products besides hair oilParachute. Company executives have said they see this pressure on discretionary spends continuing for some time.Brokerages turn positive on Marico on restructuringplansECONOMICTIMES.COM Jan 8, 2013, 04.25PM ISTNEW DELHI: Analysts at top two brokerage firms are of the view that the restructuring plan is positive forMarico and will result in value creation for shareholders and create the possibility of a strategicinvestment.The board of directors of Marico has approved the restructuring of businesses, corporate entities andorganization involving a) the demerger of Kaya Skin Care Solutions into a separate company byname Marico Kaya Enterprises Ltd (MAKE) and b) formation of a unified FMCG business.Citigroup is of the view that the restructuring is positive for the company and will result in shareholdersvalue creation opportunity with the demerger and listing of Kaya.The global bank is of the view that Marico is well placed to deliver superior earnings of 22 percent CAGR over FY12-15E driven by healthy volumes & steady margins.
  22. 22. Citigroup upgraded the stock to buy from sell earlier and has also raised its target price to Rs 260 fromRs 205 earlier based on 30x FY14E core EPS estimates. The restructuring increases the possibility of astrategic investment and value creation opportunities, said the Citigroup note.Kotak Institutional Equities has retained add rating on Marico, but has upped the price target from Rs220 earlier to Rs 240. The brokerage says the demerger of Kaya business will lead to value creation andis valuing the business at 3 times 2014 sales.Demerger of Kaya into a separate listed entity will lead to price discovery of the business. Kotakestimates Kaya to report sales of Rs 4.1 bn and breakeven at the PAT level in FY2014E.Analysts are of the view that hive-off of the loss making Kaya business would also boost the earningsgrowth, albeit modestly. Kaya has been a loss making venture for Marico and during FY2012 Kaya madea loss of Rs 29cr at the PBIT level on net sales of Rs 279cr"The demerger of the loss making venture would result in Marico turning into a pure FMCG play enjoyingsuperior return ratios," Angel Broking said in a note.At the current market price, Marico is fairly priced, trading at 28x FY2014E earnings. The Mumbai-basedbrokerage firm maintains a neutral rating on Marico.Currently the promoters of Marico have a 60 per cent stake in Marico and post demerger theshareholding structure of MAKE will be identical to Maricos current shareholding structure."Shareholders of Marico will be allotted one share of MAKE for every 50 shares held in Marico," said theAngel Broking report. "Demerger of the loss making venture would result in better return ratios forMarico," said the Mumbai-based brokerage firm.Maricos marathon man“One needs to operate to ones strengths and the FMCG business is to my strengths andthe one that I love to do.”SAUGATA GUPTA, CEO,CONSUMER PRODUCTS, MARICOLTDLunch and Mr Saugata Gupta were waiting for us when we entered his modestly-sized cabin at theconsumer goods company, Maricos headquarters at Rang Sharda, Bandra, famous for its auditoriumwhich hosts quite a bit of Mumbais theatrical action. The dapper 43-year-old CEO of Maricosconsumer goods business leaps up to greet us, hospitable and informal as ever.Over the next two hours or so, hell talk passionately about his brands, his convictions and somestrategy, over large Subway sandwiches, which he has ordered as a working lunch for us.The thing about these gargantuan Subway sandwiches, you soon realise, is as you bite into one endwith gusto, stuff starts spilling out at the other end. We decide to take turns plying him withquestions, interspersing our queries on Maricos brands with mouthfuls of unwieldy sandwich.Maintaining a level of etiquette around Mr Guptas small conference table, as cold beverage is served,we ask him whats with the acquisition fever that has had Marico and many other FMCG companiesscouting for brands from Africa to West Asia and South-East Asia. “Isnt India where the action is, onall things relating to consumption?” we „Sub-intone.
  23. 23. READY EXPLANATIONMr Gupta has a ready explanation. Operating in Africa or West Asia may be complex, butcompetition there is less bruising than it is at home.“All of us are looking at multiple pillars of growth. Its still not a focus market for many MNCs, but afocus market for many Indian companies. If you look at Africa, there are lots of similarities (withIndia). Category penetration is low, so theres scope for potential growth. Also, its a complex market;one of the competencies of Indian managers is to work in a slightly chaotic environment. The market(there) is still not competitive. While complexity is there, the relative competitive intensity being low,were investing ahead of the curve.”But for all its appetite for African and Asian forays, Marico, he says, is a “boringly consistent”company. Not for it that tall talk about a huge war chest, and being “on the prowl” for acquisitions.“Yet we are growing at a 20-per-cent CAGR. The number of exciting news items is less, but thatsokay, but the pace of growth is equally good. The focus is something we believe in.”Mr Gupta, a seasoned marketer who cut his teeth in Cadbury, is emphatic when he says he wontlaunch a new brand or step into a new category just for the sake of it. Right now, hes content withthe brand stretch that his two power brands, Saffola and Parachute, are undergoing. Marico hasclearly defined itself, he says, in the “beauty and wellness” space.“Should we want to participate in any new categories, we now have access to products. At the sametime, to market an unknown brand, common distribution, media footprint and consumers willdetermine it. And, I dont think we have acquired that scale right now.”One of the things Marico did in the last two years was to take a hard look at the brands andcategories it was supporting and deciding to shelve a few! Mr Gupta warns of the trap many FMCGplayers fall into: pursuing the Indian “consumption story” too ardently.“If you look at a growing market such as India, everyone will come up with the same list of categorieswhich are attractive. What is critical for any organisation is the ability to win in that category andthat happens when you have shared customers or a supply chain. One of the reasons we withdrewSparsh (a baby care brand launched by Marico) was that, the product was wonderful, but we didnthave the right to win because the key influencers were paediatricians and young mothers. Our targetgroup (for its other products) did not have shared consumers.”LEIT MOTIFFocus, in fact, is a leitmotif right through Mr Guptas conversation.“We were chasing too many small things; one of the things we decided was to have a „stop doing list!We had a few big bets, and are persisting with it. Thats one key strategic shift weve done and weveseen results and will continue to do so,” Mr Gupta gesticulates emphatically.So, while Saffola, the healthy oil brand, has been extended to functional foods and oats, coconut oilbrand Parachute has seen many extensions to make it more appealing, such as its recent hair fallprevention oil which has found its way into the Kerala and Tamil Nadu markets, “and, doing verywell; consumers believe a „leave-on product will nourish the hair better!”
  24. 24. INTERMEDIATE FOODSBy now most of the innards of our Subs are on the plate and were trying to pick up the pieces. MrGupta is already through, managing to polish off the sandwich even as he fielded our rapidfirequestions.If Saffola has got into oats and other functional foods, will it look to be a breakfast foods brand, weventure to ask?Mr Gupta has an interesting take. “In India, I dont see ready-to-eat products having a big market,because there is still a concept of „fresh food, theres labour available and the housewife would stilllike to prepare the food. Now, because of lack of time and convenience, what she doesnt like isnegative labour. That could be cutting vegetables, preparing a masala — theres a huge market forintermediate foods.”He also has an insight into why the same household may take to a breakfast cereal.“Today with increasing double income families, they are time-poor as far as the morning isconcerned; you can have help cooking a meal later in the day, but you wont have help cookingbreakfast.”Meal done (whew!) we glug our drink, shift gears and ask him about his career move from consumergoods to insurance and back.A chemical engineer from IIT-Kharagpur (“always wondered what use it was in my career, but atleast Im not flummoxed when I see process plants!”), Mr Gupta went on to do an MBA from-IIM,Bangalore.Later, he was recruited into Cadbury by Ms Vinita Bali (Britannia MD) and then head of marketingfor the chocolates company. Mr Gupta spent nine years marketing Cadbury brands and made anunlikely shift to head marketing at ICICI Prudential.“The reason I went from FMCG to insurance is that I wanted to be with a start-up and startsomething new. That time I was 32, age was on my side. I learnt quite a lot about managingambiguity and also about speed and aggression. A lot of learning and maturing as a leader happened. But one needs to operate to ones strengths and the FMCG business is to my strengths and the onethat I love to do.”Joining Marico as head of marketing, Mr Gupta was made CEO in 2007 at the age of 39.“Its been exciting driving growth; also the organisation has changed a lot. Without disturbing thefabric of the organisation which has a strong culture of transparency, openness, fairness, we havebrought in two new values: bias for action and a global outlook. The next challenge is as we scale up.The domestic business has crossed Rs 2,000 crore and the group Rs 3,000 crore. We have gonethrough times of volatility. That is the new challenge, inflation is here to stay, and we have to manageit; thats the new normal.”As a dyed-in-the-wool marketer, Mr Gupta believes there is nothing like working the markets himselfto glean consumer insights.
  25. 25. He talks about how he validated his own strategy for Maricos Shanti Amla brand while sitting inAgras wholesale market sipping tea with the largest amla dealer. Simple, homespun views from thedealer and Mr Gupta knew he was on the right track.An inveterate traveller, as is his wife, a banker, both of them make sure that neither is travelling atthe same time to be with their 11-year-old daughter.“And, if we need to travel to the same destination, we make sure we are on separate flights!”One can see that his daughter, Sanjana, whose many pictures are in his cabin, has Papa wrappedaround her little finger. Shes the one who brings him back to reality, he says, when sometimes shethrows up both her hands and quizzes, “Your numbers were okay, na, this month?”