Godrej Soaps expects 20% growth
The Godrej Group
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Arwa Husain - Latha Venkatraman
MUMBAI, Oct. 23 (BL)
GODREJ Soaps Ltd is planning to achieve a composite sales growth of 20 per cent, with the branded consumer products segment expected to grow at 30 per cent, in the current year.
Mr. Adi Godrej, Managing Director, Godrej Soaps, said ``We expect to achieve the growth through launch of new innovative products in toilet soaps and haircare category.'
The company is also planning to improve its sales and distribution network. he said, "We are also looking at increasing our presence in the rural market."
Currently, the company has 2,000 distributors and four lakh retail outlets. "We are planning to include leveraging distribution, including distribution for third parties," Mr. Godrej said.
Godrej Soaps has improved its focus due to the vertical restructuring that has been going on since last year. The company has divided its business into two divisions _ chemical division and consumer products division.
The chemical division is expected to report profits by fiscal 2001. "Booz, Allen and Hamilton, which has been appointed to develop future strategy for the chemical division, is expected to complete its study this month,
Mr. Godrej said.
Several analysts feel that Godrej Soaps might hive off its chemical division after it starts reporting profits. An analyst at a leading broking outfit said, "After the chemical division is restructured, the company is likely to put it up for sale."
Mr. Godrej, however, denied market rumours to this effect and said that the company would become a focussed consumer products company. This would be achieved through various restructuring options.
He said the company would continue innovation in its chemicals division. He had earlier stated that the export growth for the chemicals division was strong. Currently, its chemical products are exported to countries in all the six continents. Exports comprise 25 per cent of the sales.
Godrej has chalked a major plan to enhance sales in the consumer products division. The company is also considering acquisitions of brands in the personal and household care. Mr. Godrej, however, refused to divulge details on its acquisition plans.
The consumer products division has been further sub-divided into branded soaps, hair colour and other products. In the branded soaps category, the company is planning to re-position some of its key brand, Cinthol and Ganga, as well as introduce new products in the sub-popular and premium segments.
In hair colour and other products, the company plans to create a niche market for its categories.
Several analysts feel that the company's focussed approach is likely to improve sales and margins in the current year. The performance of Godrej Soaps has improved substantially on account of the take over of Godrej Sara Lee, an analyst said. |
