Fevicol: Stuck with a bad idea

The new ad is hackneyed and no longer captures the imagination

So, Fevicol is back. A relatively small brand, but one that is best known for its shining, award-winning creative work. Actually, Pidilite Industries (makers of Fevicol) is a dream account for any ad agency. They give their ad agency (Ogilvy & Mather) creative directors total freedom. Not something you can say for 99% of Indian clients. No wonder Piyush Pandey will never let go of the client…. he's gleefully stuck to them with Fevicol!
This time the brand is back with an extension called 'Fevicol Marine', with a promise that the bond doesn't break even under water. The TV commercial is a hark back to its age-old 'tug-of-war' ad for the mother brand. Except that this time, the action has shifted to the backwaters of Kerala. So it's once again 'Dum lagake, zor lagake, haishaaaaaa!'. The occasion is the State's famous snake boat race. Two snake boats are tied to an ancient chair that's placed under water.

 With each boat and its crew pulling from the opposite directions. Egged on by an excitable chap, who I assume must be the brand manager of Fevicol. The idea quite obviously is to demonstrate that the kursi bonded by Fevicol Marine will stay in one piece in these testing conditions.
So no bets for guessing the boatmen lose this competition. Cool. Once again Fevicol does what it does best: make a wild claim using wild exaggeration as the creative route. Don't know how much of it helps in the market place, but award juries are stuck with Fevicol.
My own take: Very disappointing ad. It's an ordinary ad, not even a patch on Fevicol's own sensational past body of work. An obvious idea for a marine adhesive: go under water. And the snake boat trick has been so done to death in Indian commercials, it no longer captures the imagination. In fact, it's totally hackneyed. Some would argue that product performance is nicely demonstrated, so then why crib? Yes, that's true. And for any other brand one wouldn't have dissed this creative. But not for Fevicol. You don't come up with such banal work for any ad agency's dream brand. It's unforgivable, it's criminal.
Methinks creative 'god' and O&M honcho Shri Piyush Pandey is on his annual leave, and is holidaying in some exotic location faraway (no, not the Kerala backwaters!). And so he didn't get a chance to whet this dull storyboard. Come back soon, Sirji! Else your own bond with Pidilite might just come undone. Haishaaaaa!


Fast-moving consumer companies are fast-moving stocks in bourses too

Long considered as ‘defensive’ stocks meant to be held only as a cushion during a market collapse, FMCG companies are charting phenomenal growth and their stocks prices are keeping pace

It is common perception that stocks of fast moving consumer goods (FMCG) companies are defensive stocks. They often take a backseat to the more fancied and hyped growth stocks like software, automobiles or media. It is believed that these stocks should only be considered as a defence mechanism during bear phases. When the broader market is down, these stocks hold their ground reasonably well, offering stability to the portfolio while other stocks take a beating.
Well, the 'stability' logic still holds water. FMCG products, by their very nature, are essential for the daily requirements of all households-be it detergents, soaps, toothpaste etc. Demand for such bare essentials remains steady even during economic downturns. That is why these companies witness steady growth even when other industries are reeling from the consequences of a slowdown.

But, for years now, the performance of FMCG stocks has been far from defensive. It is time that FMCG stocks are stripped off this oft-repeated and generalised 'defensive' tag. Like their products, the stocks are fast-moving as well. Many of the stocks have surged to new all-time highs, outperforming the broader market indices handsomely.

Companies like ITC, Dabur, Godrej Consumer Products, Nestle and GSK Healthcare have performed quite well over the past five years. As a result, their stock prices have also exhibited phenomenal growth. In 2003, ITC was Rs40.

 Currently it is trading at Rs291. In 2006, GSPL was trading at Rs27 and now finds itself at Rs99. Similarly, Dabur and Nestle were trading at Rs12 and Rs500 in 2003-they are now trading at Rs192 and Rs2,811 respectively. GSK Healthcare, which is now trading at Rs1,655, was trading at Rs201 in 2003.

In the last quarter of the previous financial year the results have been especially great. While the Sensex has fallen by 2% between 4 January 2010 and 4 June 2010, the FMCG index has risen by a healthy 10%. Other sectoral indices like auto, banking and software have only risen by 6%, 7% and 2% respectively during this period. The future looks as bright. A KR Choksey report on the FMCG sector states, "We expect FMCG companies to continue their growth story with improvement in the overall economic scenario and consumer spending.

With a likely normal monsoon as is expected by most experts, which would help cool off inflation, it will result in improvement in margins for all companies. Also, normal monsoons would increase the disposable income for rural consumers, giving them scope for more spending on consumer goods."

An Anand Rathi research report confirms, "With falling food inflation and a normal monsoon expected, we expect consumer companies to maintain the revenue growth tempo. However, we anticipate mounting competition to crop pricing power. With the fall in price of crude and lower raw material prices, margins would hold steady." According to KR Choksey, companies with a more diversified portfolio-both product-wise & geography-wise-would benefit more. This would include Nestle, GCPL, Tata Tea and Colgate.

Here is a brief look at the recent performance of some of the top FMCG companies. ITC reported a strong net profit growth of 27% y-o-y on the back of strong revenue growth in cigarettes, agri-business and FMCG businesses.

Revenues surged 30% while EBITDA increased by 25% y-o-y. The stock has reflected the strong growth momentum, surging 15% since its January opening.

Godrej Consumer Products Limited's (GCPL) revenues soared 48% on the back of robust growth in both domestic and international operations. Net profit jumped a phenomenal 55% while EBITDA also surged 52% y-o-y. GCPL's share price has also taken off, rising by 15% since January 2010.

Dabur is not far behind the growth curve either. Dabur's acquisition of Fem Care and strong volume growth boosted its top-line, which witnessed a 17% rise in the financial year 2009-10. Its EBITDA also expanded by 28% due to lower input costs. Dabur's stock has seen a 20% jump since January.

GSK Healthcare has also reported good numbers for the previous financial year. Strong volume growth in biscuits and nutrition supplements and improved realisations boosted its top-line by 20% while net profit rose by 15% y-o-y. Its stock price has surged 26% since January.




Bhopal gas tragedy: Keshub Mahindra, 7 others convicted

All the convicts applied for bail immediately after the sentencing and were granted relief in the case

A quarter century after the world's worst industrial disaster that killed over 15,000 people, a court today convicted former Union Carbide India chairman Keshub Mahindra and seven others in the Bhopal Gas tragedy case and awarded them a maximum of two years imprisonment.

However, 89-year-old Warren Anderson, the then Chairman of Union Carbide Corporation of USA, who lives in the United States, appeared to have gone scot free for the present as he is still an absconder and did not subject himself to trial.
There was no word about him in the judgement delivered by Chief Judicial Magistrate Mohan P Tiwari 23 years after trial commenced.

All the convicts applied for bail immediately after the sentencing  and were granted relief in the case, the judgement of  which comes against the backdrop of a debate on the Civil Nuclear Liability bill which would provide for compensation to victims in case of a nuclear disaster.

Tiwari pronounced the verdict in a packed court room convicting 85-year-old Mahindra, the non-executive former chairman of UCIL, and seven others in the case relating to leakage of deadly methyl isocyanate gas in the night intervening December 2 and 3, 1984.

They were held guilty under Sections 304-A (causing death by negligence), 304-II (culpable homicide not amounting to murder) and 336, 337 and 338 (gross negligence) of the Indian Penal Code.

Others found guilty were Vijay Gokhle, the then managing director of UCIL, Kishore Kamdar, the then vice president, J N Mukund, the then works manager, S P Choudhary, the then production manager, K V Shetty, the then plant superintendent and S I Quereshi, the then production assistant.

Mahindra, who had declined a Padma Bhushan award in 2002 on grounds that he was facing trial in the case, and six others were present to hear the judgement while Quereshi was represented by his counsel.  The sentencing for Quereshi is yet to be announced.

They were sentenced to two years imprisonment and awarded a fine of Rs 1 lakh each under section 304(a), imprisonment of 3 months and a fine of Rs 250 under Sec 336, 6 months and Rs 500 under Sec 337 and 2 years and Rs 1,000 under Sec 338. All the sentences will run concurrently.

Civil rights activists fighting for the families of victims of the disaster called the judgement "too little, too late" and accused the prosecution and CBI of failing the victims by diluting the charges. 



R Balakrishnan

7 years ago

The tragedy of poor prosecution, which seems to be deliberately designed to let go the murderers. These seven jokers should be behind bars for the rest of their useless lives, at the minimum. It will teach people not to join boards for prestige and social boasting. The judgement is not to be blamed. Thie punishment is max for what the charges have been framed by a corrupt prosecution

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