Household insecticides, the bone of contention between Godrej and Mahendran

Godrej group Chairman Adi Godrej's recent outburst against former Godrej Consumer managing director A Mahendran originated after the latter's move to step into the household insecticides category.

61-year-old Mahendran is considered an authority on household insecticides, having launched and established the Good Knight brand of mosquito repellents along with R Mohan of Transelektra Domestic Products in 1987 which was subsequently acquired by the Godrej Group in 1994.  Mahendran then became a part of the group in 1995, when he was appointed managing director of Godrej Hi Care — a pest management company, which Mahendran aggressively expanded. It was then sold to Danish firm ISS in 2009.

Two years ago, Mahendran bought back Hi Care from ISS for Rs 150 crore. The deal also involved private equity fund India Value Fund, which picked up an 80 per cent stake, with the balance being held by Mahendran. His plan was to take it to more places and expand its portfolio.

This was the first signal that he was putting in place his household insecticides business after his exit from Godrej Consumer in 2013. The next part of the strategy was to get a product brand in place.

While Mahendran was not available for comments, it is his plan to launch an insecticide brand called DND under his Goldman-Sachs-and Mitsui-backed venture Global Consumer Products which has raised hackles within the group.

DND will compete directly with Good Knight — the leader in household insecticides in India. While Mahendran has said he has no non-compete agreement with the group, analysts say the likely head-on competition may have provoked Godrej to describe the move as a “serious ethical and legal breach”. Godrej Consumer derives around 45-48 per cent of its revenues from household insecticides. The other two segments include soaps and hair colour, giving it 35 per cent and 20 per cent respectively in terms of topline.

Over the years, it has launched a series of innovations in household insecticides including a Rs 1-priced Good Knight fast card which has helped it to make inroads into rural markets. The firm has also come out with innovations for urban areas such as an anti-roach gel under Hit.

The company is also taking Good Knight to markets such as Nigeria to expand iy base in emerging markets.