Godrej Consumer Products to focus on new ‘3x3 strategy’

GCPL plans to expand its international market presence through this strategic move, with a focus on Asia, Africa and South America

Godrej Consumer Products Ltd (GCPL) has chalked out a new plan for focusing on the international market. It is concentrating on a ‘3x3 strategy’ to penetrate deeper into Asia, Africa and South America, with three product segments—personal wash, hair care and insecticides. 

“It (the 3x3 strategy) is part of our globalisation strategy where we are concentrating on three categories and three continents. We are focussing on these continents to understand the market better. Our strategy always has been to focus on developing countries, because they have high populations. Even consumption of our products is high in these places,” said Hoshedar K Press, vice chairman, GCPL.
 
The company spent Rs100 crore-Rs125 crore to acquire Tura, a Nigerian beauty products company. This is the company’s third acquisition in Africa. 

In April 2010, GCPL acquired Megasari—a leading consumer products company in Indonesia, which has notched up revenues of $120 million in the past fiscal with estimated profit-after-tax margins of 11%-12%.

It is also the second-largest player in the insecticides market, enjoying 35% market share of Indonesia’s household insecticides market (with a total size of $150 million, growing at 20%). It also has 45% market share (of a total $68 million market, growing at 45%) in the air-care segment and 80% market share of the $21-million wipes market (growing at 45%). Megasari has 15% share of the breakfast cereals market.

 Earlier in October 2005, GCPL had acquired UK-based Keyline for approximately £13 million. During the same year in September, it acquired the South African business of British company Rapidol for Rs50 crore. South Africa-based Kinky Group was bought out for around $34 million in April 2008.

Last year, GCPL acquired a 49% stake in Godrej Sara Lee and is looking to buy out the remaining stake. It has passed an enabling resolution to raise Rs30 billion in order to fund inorganic growth (India and other emerging markets would be key focus areas).

All the big players in the FMCG market are now eyeing Africa. Marico Ltd acquired the ‘Fiancee’ hair care brand owned by Egypt-based Ready Group; Emami is looking at buying an FMCG firm in Egypt. Emami is also looking at buying several other personal care firms in the region and the company is almost certain of having its first manufacturing facility up and running in Africa this year. Emami also has plans to set up three more manufacturing bases in Africa over the next two-three years.
 

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India should target $110 billion in engineering exports by 2014: E&Y

Government says that this target is achievable; it is also looking at incentives for modernisation and induction of new technology at manufacturing facilities

India should aspire to achieve a three-fold increase in its engineering exports to $110 billion by 2014, according to an Ernst & Young (E&Y) strategy paper released today, reports PTI.

The study, commissioned by the Engineering Export Promotion Council (EEPC), said that engineering exports would have to grow by 22%-25% annually for reaching the milestone.

“This, indeed, is a robust target and if the engineering sector is able to maintain its share of nearly 22% in total exports, $110 billion is certainly achievable,” commerce and industry minister Anand Sharma said while releasing the paper.

In 2008-09, the country's engineering exports stood at $37.85 billion.

The share of engineering items in India’s total exports is much lower than that of the developed world, the E&Y paper said.

In 2008, engineering exports contributed 23.6% to the overall exports of the country.

Due to the global slump in demand, the country’s overall exports contracted for 13 consecutive months since October 2008, before turning positive from November 2009.

Engineering exports are estimated to have declined by about 20% in the last fiscal.

Mr Sharma said that the Directorate General of Foreign Trade (DGFT) is undertaking sectoral reviews, which are expected to be completed soon.

“Once the report is available to us, we will take a considered view for policy intervention,” he said.

The paper suggested several measures to increase engineering exports. It said that the government should give incentives for modernisation and induction of new technology at manufacturing facilities.

The government should also set up a skill development fund to impart training in areas where technology up-gradation is being initiated to enhancement productivity and quality, it said.
 

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