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| Indonesian takeover to propel Godrej as No. 2 in Asia |
| Byravee Iyer / Mumbai Apr 19, 2010, 00:49 IST |
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The Rs 10,000-crore Godrej is all set to become the number two player in household insecticides in Asia (excluding Japan), with Godrej Consumer Products’ recent acquisition of Indonesia’s Megasari Makmur.
“We’re already the market leader in household insecticides in India and we want to leverage that across other countries as well,” said Godrej Consumer Products (GCPL) Managing Director Dalip Sehgal.
SC Johnson of the US is number one. GCPL hopes to complete the Indonesian acquisition in a couple of months. Godrej will thus have two large ventures in the business: Megasari Makmur and Godrej Sara Lee (of which the group owns 51 per cent). At the moment, Godrej stands fifth in the sweepstakes. (‘Overseas Call’ in The Strategist distributed with today’s edition details how Godrej wants to spread its wings in Asia and Africa in the product categories of hair care, personal wash and household products like insecticides.)
Investment analysts reckon that the Indonesian acquisition will raise Godrej’s household insecticides business to over $250 million (Rs 1,100 crore). At $345 million, Indonesia is the fourth-largest market for household insecticides in the world after China, Brazil and India. Megasari Makmur has as much as 35 per cent of this market. Godrej Sara Lee had closed 2008-09 with a turnover of Rs 755 crore. Not all of this revenue came from insecticides. Apart from insecticides like Goodknight, Hit and Jet, it also owns Kiwi shoe polish and Ambipur car purifier.
Godrej Sara Lee sells in 51 countries, though a large part of it is in the Indian sub-continent. It has full-fledged operations in Sri Lanka and Bangladesh and is now setting up a plant in Nepal as well. Within India, it covers the whole spectrum of household insecticides with mats, coils, lotions and aerosols. Goodknight, a mosquito repellent in all the four forms, is a category leader. Jet is smaller but has a market share of around 80 per cent in anti-mosquito coils in Andhra Pradesh. Hit, which is for use against flying and crawling insects like cockroaches, has built the category from scratch in the last 15 or so years.
Megasari Makmur, a company that was formed in 1996, owns brands like Hit, Stella and Mitu, and runs six factories. It is also in the business of air-care products and wipes.
It is possible that Godrej may soon take its household insecticides products to Africa. GCPL has acquired two hair care companies in South Africa (Rapidol and Kinky) and a personal wash company (Tura) in Nigeria. These companies have a large distribution network in place, which Godrej wants to leverage to sell other products in its portfolio, including insecticides. At present, a quarter of Godrej’s annual turnover comes from abroad. The contribution is expected to rise sharply in the days to come.
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