Date:01/02/2005 URL: http://www.thehindubusinessline.com/2005/02/01/stories/2005020102331100.htm

Back Poddar to make more investments in Gillette India — No plans to exit

Sindhu J. Bhattacharya

New Delhi , Jan. 31

PROCLAIMING that he has no plans to exit Gillette India Ltd (GIL) pursuant to the global acquisition by Procter & Gamble (P&G), the Chairman, Mr Saroj K. Poddar, on Monday said that he instead plans to make "significant" investments in the company to strengthen its market share.

Last week, P&G announced acquisition of The Gillette Company, but implications of the deal for GIL's Indian operations are not clear till now. Mr Poddar, credited with bringing Gillette to India, is the single largest shareholder in the company with 15 per cent stake.

"None of us in India are aware of the fallout of the acquisition of The Gillette Company by P&G as of now. Given a choice, I am not a seller and would not like to exit GIL. I think the company has great future potential and in fact, we are on course to make significant investments in it to grow its market share," Mr Poddar told Business Line from Kolkata.

The total Indian promoters' holding in Gillette India is a little over 44 per cent whereas foreign promoters hold about 41 per cent stake, as on December 31, 2004.

"I will not block the merger (GIL into P&G) in case it happens for the Indian operations. I want to remain part of the merged company, but everything depends on how negotiations go at that time," he added.

Mr Poddar said Gillette India is a cash-rich, zero-debt company with Rs 200 crore surplus cash. "We have decided to significantly step up investments in the advertising and marketing budget for 2005 and we have no hesitation in making any further investments needed to propel the company forward."

While acknowledging that the company was not performing well till about two years ago due to massive restructuring, Mr Poddar said this scenario has changed and it is now logging 10-15 per cent growth annually.

Asked whether Gillette India's areas of operations - shaving products, batteries and toothbrushes - had a good growth potential, he said that regardless of whether P&G acquires Gillette India in India or not, these businesses will continue to grow. "In fact, P&G's acquisition will provide us access to a great distribution system. I doubt whether the acquisition will have any negative impact on GIL's growth."