Emami to seal Egyptian buy soon

Kolkata-based Emami, the maker of Fair & Handsome and Boroplus creams, is in the final stages of acquiring a manufacturing unit of an FMCG (fast moving consumer goods) company in Egypt. The deal would be announced soon, a company executive said on condition of anonymity. Emami is likely to fund the deal, estimated to be around Rs 100 crore, through internal accruals.

For Emami — which exports products to the Middle East, Africa, CIS countries and neighbouring countries in South Asia — the move was in line with its strategy of setting up a regional hub there, said Prashant Goenka, director of the company’s international business. “So far we have been sourcing products from India and some other countries, then exporting them,” he said. “A manufacturing hub in Egypt will allow us to produce as well as export products easily to countries in Africa and the Middle East. This will help bring down costs.”

Emami exports close to 200 products across skincare, haircare and over-the-counter products. Most of these were made keeping in mind local preferences, though a few were exported from the Indian range, said Goenka. “Localisation is a key part of the business. We won’t deviate from it.”

International business contributes 20 per cent to Emami’s overall turnover. Goenka is keen to take this to 50 per cent in the next five years. For this, he envisages greater penetration of his products into the African continent, especially South Africa, where Emami has no presence. “That market is on our radar,” he said. “We export to the west, north, east and central parts of Africa. The south is a market we need to explore.”

Africa is a key contributor to Emami’s international business, with a roughly 33 per cent share. The Gulf countries follow next at about 30 per cent, while the Indian subcontinent and CIS countries are evenly placed at about 18-19 per cent each.

Emami also wants to add the Southeast Asian region to its list of export countries by the third quarter of this year. “That is one more market we will add to our list,” said Goenka. “It is an important one from an export point of view.”

The company would continue to scout for acquisition opportunities abroad, said Goenka, provided it fit into the company’s larger scheme of things.