Dabur looks at buys in West Asia, Africa

Fast moving consumer goods (FMCG) major Dabur is scouting for overseas acquisitions, particularly in West Asia and Africa, in a bid to increase its market share in the personal care segment.

“Our foreign business contributes 20 per cent of Dabur's top line. We expect this figure to go up to 25-30 per cent in the next financial year, when we will take the inorganic route,” Dabur Group Director P D Narang told Business Standard.

The acquisitions will be in markets in which the company already enjoys a broad and consolidated base, including West Asia and Africa, especially Egypt and Nigeria, where the brand has considerable presence.

“We are present in about 60 countries and are now looking at the inorganic route to increase our footprint abroad. This would help us gain more of a market overseas,” Narang added.

With the acquisition of Fem Care, Dabur strengthened its presence in global markets. The West Asian market for the company has one distributor, Spiniz, which enjoys a 17 per cent margin compared with its Indian counterpart's 5 per cent margin. Overall, Fem Care contributes 3 per cent to Dabur's revenues.

“Dabur now has a greater hold over overseas markets, especially in West Asia which is the company's largest market and contributes 30 per cent of overseas revenues,” a senior analyst said on condition of anonymity.

Post-acquisition, Fem Care has grown to become a Rs 110-crore brand. As far as pushing the Fem Care brand further in overseas markets is concerned, the company says it is looking into registration and trademark procedures.

Narang explained Dabur has divided its foreign markets into three categories. The first are the focused markets, where the company is pushing on all fronts in terms of product promotion and advertising (eg, Egypt); then come potential markets, which do good business but are not really ripe markets (including South-East Asia); and, finally, there are opportunistic markets, “which are not ignored as such, but do not have distributors” (like Fiji).