Dabur takes a small step in southern Africa

Dabur recently acquired a newly incorporated company in South Africa and is planning to set up a manufacturing unit in that country

An acquisition worth a mere Rs 4,700 is rarely expected to give rich dividends, especially if it means venturing into a market as big as Rs 30,000 crore. However, home-grown fast-moving consumer goods firm Dabur is trying something similar.

The company recently acquired a newly incorporated company in South Africa and is planning to set up a manufacturing unit in that country. The move would help it expand its presence in the southern parts of the African continent, sources said.

Dabur India on Monday informed the BSE that it acquired Discaria Trading, registered in South Africa, for Rs 4,679 (1,000 South African Rand). Dabur’s wholly-owned subsidiary Dabur International acquired 100 per cent of Discaria, it informed the BSE. “Discaria Trading (Pvt.) Ltd. has been acquired to do the business of manufacturing and trading of cosmetics products in South Africa,” it said.

Currently, Dabur has two manufacturing plants in the continent — one each in Nigeria and Egypt. The acquisition cost of the company, incorporated on March 30, 2015 to trade and manufacture cosmetic products, is lower than any such recent acquisition by Dabur. The real value of the company lays in its potential to become a gateway for Dabur in the crucial southern African markets.

Earlier, Dabur made its first foreign acquisition by buying Hobi Kozmetik Group, a leading personal care products company in Turkey, for $69 Million (Rs 462 crore). In 2010, it also acquired Namaste Laboratories in the US for $100 million (Rs 670 crore).

However, Dabur’s recent acquisition was aimed at setting up production units in South Africa, sources said. Dabur is also considering expanding its presence with its international personal care brand Namaste.

The cosmetics markets in the southern parts of Africa – South Africa, Zimbabwe, Namibia and Mozambique - is estimated in excess of Rs 30,000 crore and is growing in double digits. Dabur currently gets a third of its Rs 8,454-crore revenue from foreign markets.