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Godrej Consumer Products Ltd.

BSE: 532424 Sector: Consumer
NSE: GODREJCP ISIN Code: INE102D01028
BSE LIVE 15:17 | 18 Aug 917.50 -2.75
(-0.30%)
OPEN

915.05

HIGH

926.25

LOW

897.85

NSE 15:02 | 18 Aug 918.80 -0.80
(-0.09%)
OPEN

913.00

HIGH

924.25

LOW

898.00

OPEN 915.05
PREVIOUS CLOSE 920.25
VOLUME 149725
52-Week high 1083.65
52-Week low 642.78
P/E 74.05
Mkt Cap.(Rs cr) 62,509
Buy Price 916.10
Buy Qty 95.00
Sell Price 917.50
Sell Qty 88.00
OPEN 915.05
CLOSE 920.25
VOLUME 149725
52-Week high 1083.65
52-Week low 642.78
P/E 74.05
Mkt Cap.(Rs cr) 62,509
Buy Price 916.10
Buy Qty 95.00
Sell Price 917.50
Sell Qty 88.00

Godrej Consumer Products Ltd. (GODREJCP) - Chairman Speech

Company chairman speech

Dear Shareholders

I am very pleased to share with you that GCPL has delivered yet another strong andprofitable performance in fiscal year 2016. This is despite the macroeconomic challengeswe faced in many of our geographies. Overall we continue to outperform both the FMCGsector and the home and personal care categories that we participate in. This positions uswell to achieve our ambitious growth aspirations of becoming an emerging markets FMCGleader.

This is a very exciting time for our company. We are driving a relentless focus on ourstrategy and investing strategically in creating new growth vectors for the future whilecontinuing to drive our core to full potential ensuring execution excellence and buildingon our agile and high performance culture. We believe that this is what differentiates usand allows us to continue to innovate and delight our millions of consumers across theworld with superior quality world-class products at affordable prices.

"This is a very exciting time for our company. We are driving a relentless focuson our strategy and investing strategically in creating new growth vectors for thefuture while continuing to drive our core to full potential."

The global economy

The global environment continues to be marked by economic and socio-politicaluncertainty. Emerging markets are grappling with tougher conditions given depreciatingcurrencies and slower growth. The consequent slowdown in consumer sentiment has in turnimpacted growth in the FMCG industry.

That said we believe that there are significant medium and long-term growth prospectsin India and our other emerging markets in the rest of Asia South America and Africa.Today emerging markets account for around 80 per cent of the world’s population.They are also growing fast with a relatively young working age population. This combinedwith an emerging middle class ensures that a majority of the increase in globalconsumption in the years ahead will come from these markets.

The Indian economy

Over the last year the government has launched a series of initiatives to revive theIndian economy including building infrastructure in roads and railways improving theease of business creating a more investor-friendly FDI policy regime introducing bankingreforms and targeting inflation.

Consequently our macroeconomic indicators have started to look better with GDP growthincreasing to 7.6 per cent in fiscal year 2016 from 7.2 per cent in fiscal year 2015.Inflation is largely under control. The Consumer Price Index is expected to fall withinthe range of 5-6 per cent and Wholesale Price Index virtually nil. Our Current AccountDeficit is also under control. The implementation of transformative structural reformssuch as the Goods and Services Tax however is imperative to fast track economic growthand boost consumer confidence.

We are seeing signs of a recovery in consumer demand in the FMCG industry. The progresshas however been subdued. We expect demand to pick up pace in the months ahead. Thefundamentals of the sector remain strong and there is still significant growth potentialgiven the low penetration and consumption rates for many FMCG categories.

Perspectives on our performance

One of our most important imperatives is to extend leadership in our core categoriesand geographies. Our approach to international expansion is defined by a focused 3 by 3strategy – a presence in three business categories (personal care hair care and homecare) in three geographies (Asia Africa and Latin America). Our strategy will be to driveinnovation led growth in the categories where we are leaders and have a competitiveadvantage.

Today we rank among the largest household insecticide and hair care players inemerging markets. In household insecticides we are the leader in India the secondlargest player in Indonesia and are expanding our footprint in Africa. We are the leaderin hair extensions in Africa the number one player in hair colour in India andSub-Saharan Africa and among the leading players in Latin America. We rank number two insoaps in India and are the number one player in air fresheners and wet tissues inIndonesia. We are also a leading player in hand sanitisers and female deodorants in theUK.

Our India business has continued to deliver a competitive performance withindustry-leading volume growth. Indonesia our largest international business grew wellahead of the FMCG market in the country. We have made good progress on the next phase ofthe integration of the Darling businesses in Africa. We also acquired Strength of Naturea leading company of hair care products for women of African descent. This catapults us tobecome one of the largest players globally serving the hair care needs of women ofAfrican descent. Our businesses in Latin America and the UK too have performed well.

Accelerating the pace of innovation is a key strategic pillar and driver of our growthstrategy. Over the last few years we have rearchitected our approach. We are using designthinking to accelerate our innovation pipeline reimagine our brands (Cinthol GodrejExpert Good knight) and create new ones (Godrej aer protektBBLUNT).

We are ramping up capabilities investing significantly in Research & Developmentand Design and leveraging learnings from across our geographies. We have added to ourproduct portfolio with a number of launches and relaunches across India and ourinternational businesses. Through this we are driving penetration and increasingconsumption in our core categories as well as extending into attractive adjacencies. Ournew products have been very well received in the market. In fact close to 40 per cent ofour growth in India now comes from new products and renovations. GCPL was ranked number26 on Forbes’ list of

The World’s 100 Most Innovative Growth Companies 2016.

We have introduced multiple initiatives to enhance our go-to-market approach and createa future ready sales organisation for our India business – strengthening our presencein rural driving category penetration increasing rural salience leveraging technologyfor better decision-making and establishing a strong footprint in emerging channels likee-commerce.

"We will continue to invest competitively in our brands build on our strong salesand profitability growth momentum and enhance our go-to-market infrastructure"

Leveraging a best-in-class global supply chain to become more agile is imperative forus. We have established centres of excellence in TPM lean six sigma and low costautomation across our businesses. We are also strengthening and enhancing our supply chainprocesses planning and replenishment capabilities to respond to constantly changingconsumer demand patterns. We have made significant improvements in labour productivitythrough effective shop floor engagement and are leveraging our global scale to optimiseprocurement costs. Driving sustainable manufacturing and supply chain practices inpartnership with our vendors continues to be a priority and has resulted in significantimprovements.

We take much pride in being an inspiring place to work and are committed to attractingand retaining the best global talent. We were ranked the number 1 FMCG company to work forin India in the

Great Place to Work Survey 2015.

This is our twelfth consecutive year on the list. We ranked number 9 on the Great Placeto Work - Best Workplaces in Asia 2016 list and were featured among Aon Hewitt’s top25 Best Employers in India 2016.

The Godrej Group has always actively championed social responsibility. We are deeplycommitted to driving the social progress of the communities that our businesses operatein. Godrej Good & Green is our vision for helping create a more inclusive and greenerIndia through ‘shared value’ initiatives that create both social and businessbenefits. As part of Good & Green by 2020 we will aspire to train 1 million ruraland urban youth in skilled employment create a greener India and innovate for good andgreen products. GCPL plays a key role in Good & Green through various employabilityand environmental sustainability initiatives.

Outlook

Going forward we are confident of growing ahead of the market and delivering astronger operating performance in fiscal year 2017. While some of our internationalmarkets will continue to face macroeconomic challenges we believe that the opportunitiesare tremendous. We will continue to invest competitively in our brands build on ourstrong sales and profitability growth momentum and enhance our go-to-marketinfrastructure.

I would like to take this opportunity to acknowledge the many contributions dedicationand commitment of all our team members which makes our company so successful. My deepappreciation to all our business partners vendors and other business associates for alltheir contributions. To the various central and state government authorities many thanksfor all the support that they continue to extend. Finally a special thank you to all ourstakeholders for their interest faith and encouragement through the years. We lookforward to your continued support in the years ahead.

Yours sincerely
Adi Godrej
Chairman