Chennai-based CavinKare may shift base to Mumbai

Chennai-based CavinKare Pvt Ltd, maker of brands such as Chik and Nyle shampoos, may shift its base to Mumbai, to harness the strengths of the city, says chairman & managing director C K Ranganathan.

The move comes when the Rs 1,100-crore company is looking to grow across its four divisions of fast moving consumer goods (FMCG), foods, salons and restaurants. It also wishes to raise money through the private equity route to support this growth.

A shift of base, says Ranganathan, would help it make the leap forward and give it easier access to talent. "The ecosystem in Mumbai is something we can tap into if we look at a possible shift of base. It is something we are open to," he says.

It had already moved its marketing personnel to Mumbai about six months earlier. "In the next two months, our sales force will also move to the city," Ranganathan says.

The move to Mumbai is also tied in to CavinKare's larger objective of making the transition from being a regional to a national player. The firm derives the bulk of its revenues from FMCG at the moment, which includes its personal care business. Ranganathan says he is keen to see the contribution from foods, salons and restaurants grow. For this, the firm will be taking its snack brand, Garden, acquired in 2009, to states beyond the current regions of Maharashtra, Madhya Pradesh, Karanataka, Tamil Nadu and Andhra Pradesh. Its beverage brand, MAA, also acquired in 2009, will see a national rollout, he says.

On the salon business, Ranganathan says the company will scale up the number from the current 150 outlets to 300 in the next few years. CavinKare has four salon brands -- Naturals, Page 3, Green Trends and Limelight — in the southern states of Karnataka, Tamil Nadu, Andhra Pradesh and Kerala. "We have just two or three outlets in Kerala. The bulk are in the other three states," he says. The ramp-up to 300 outlets will be restricted to the south.

In comparison to its other businesses, CavinKare's restaurant business is a fledgling enterprise, with three outlets of Vegnation, a pure vegetarian restaurant, in Chennai and Puducherry. Ranganathan does not rule out the possibility of increasing the number of these restaurants and even targeting the Indian diaspora. "But we would like to make sure it is attractive enough for franchisees. At the moment, the outlets are company-owned. We would like to move to a franchisee model," he says.

He believes the company is likely to close this financial year with a turnover close to Rs 1,400 crore, about 25 per cent growth over last year.