Date:18/02/2006 URL: http://www.thehindubusinessline.com/2006/02/18/stories/2006021801960800.htm

Back Marico sees 20 pc growth next fiscal

THE CMD of Marico Industries, Mr Harsh Mariwala, is hopeful that the company's growth in the next fiscal would be around 20-30 per cent. He feels the acquisition of Nihar would help the company increase its market share in coconut oil segment.

Excerpts from CNBC-TV18's exclusive interview:

Tell us the kind of growth plans you have for Marico and from which segment are you seeing the highest potential?

Our growth strategy is a combination of organic and inorganic growth. This year, we have completed four acquisitions. Three small acquisitions in soaps - two in Bangladesh and one in India. And one large acquisition for coconut oil and perfumed coconut oil. That is one route to growth and another is our new product strategy and launch strategy. We have just launched two new products in Mumbai, one in Chennai, and one in Kolkata. In addition, our existing products would also continue to drive growth.

Put the Nihar deal in perspective for us and how do you see Marico's hair oil business positioned versus a competitor like Dabur?

The Nihar deal increases our market share in coconut oil as well as perfumed coconut oil segment. Moreover, Nihar brand is mainly active in the Eastern markets and that is where we are not so strong. So, it provides some distribution synergies for our existing products, because Nihar's distribution is better than our products, especially in Bihar and West Bengal. We also get some consolidation synergies in terms of sourcing and backroom benefits and also some tax benefits, in terms of tax write-offs.

What about your new forays, Kaya and Sundari? What sort of margins are they performing at and when do you expect that to break even?

We have 44 Kaya clinics at present and in the next six months we have decided to consolidate that business because it needs to have the necessary building blocks in place. Last year, we had spent a lot of energy in expanding and felt that it is the right time to consolidate. In the Gulf, we have opened one more outlet in Abu Dhabi and we should be able to break even in 06-07. On the Sundari front, the progress is a little slow and we are getting entries in good Spa locations, but it is taking a long time. So, the breakeven could take time.

Put the edible oil business in perspective for us? The relative growth you are seeing in that business, as compared to the hair oil business, where have you been complementing with inorganic growth?

In the edible oil business we have the high end Saffola brand. We also have Sweekar, but we are not investing in that. In Saffola, we have three variants and I think that is where growth will happen. This year we had a double-digit growth in Saffola and we expect that to continue in the next year too.

Putting businesses together, what growth can we expect in the topline?

I do not know the exact figure, but next year a good part will come out of acquisitions. I think the topline growth will be in the range of 20 to 30 per cent.