FMCG cos say rural focus to augment sales

Hailing the rural-oriented Budget, the fast moving consumer goods industry today said the improved rural economy would augur well for the sector.
"It is largely positive for FMCG; proactive efforts to drive demand and increase consumption should revive growth. Over the last couple of months, as GST implementation is settling down, we are seeing FMCG growth come back on track and these initiatives will provide an additional fillip, especially to rural," Godrej Consumer Products Managing Director and CEO Vivek Gambhir said.
"However, the need is to ensure that these initiatives get translated into tangible results through faster implementation and better on-ground execution," he added.

Further, accelerating rural infrastructure projects will improve connectivity and thereby FMCG distribution networks, he said.
Concurring with him, Jyothy Laboratories joint MD Ullas Kamath said it is a well-rounded and forward looking budget with key focus on economy growth drivers and job creation.
"The Finance Minister has presented a very realistic budget with focus on critical areas like agriculture, health, job creation and skill development. We expect rural demand to pick up as disposable income goes up following slew of measure," he said.

Echoing similar sentiment Marico MD and CEO Saugata Gupta said, it is all-inclusive, forward-looking and has a strong thrust on agriculture, rural, MSME, education, healthcare, infrastructure and employment, which augurs well for FMCG companies.

"One prominent nuance of this year's budget speech has been the focus on digital transformation which is a significant step that reaffirms the government's impetus on building a digitally empowered country. This will also provide an opportunity to reach larger masses more effectively and economically. The initiatives if executed well, will improve the livelihood and disposable income in the hands of masses, especially in rural India," he added.
Dabur India CEO Sunil Duggal said a budget that is focused on improving the quality of life in rural India was on expected lines. Emami Group director Aditya Agarwal said the budget is in the right direction to bridge the socio-economic gap.

Parle Products category head Krishna Rao termed it as a progressive budget and said, "from a business perspective, development of infrastructure will have positive impact on FMCG players like Parle Products as rural markets are equally important to us."
He however noted the higher customs duty that will consequently increase the cost of vegetable oil.
"Ultimately, we expect this to increase input costs, considering the extent to which vegetable oil is utilised across food-related businesses and households," he added.
The finance minister today also proposed to increase the customs duty on beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or suntan preparations, manicure or pedicure preparations, preparations for use on the hair, bath preparations, personal deodorants among others to 20 per cent from 10 per cent.

"A hike in customs duty will definitely impact the sector negatively, however the exact implications will have to be understood, once the policy details are known," The Body Shop India chief operating officer Shriti Malhotra said.
Cholayil Chairman and MD Pradeep Cholayil said, "we hope that the boost to the rural economy will enhance the purchasing power of the people thereby having a direct effect on the economy, as a whole."
"We are confident that the funds allotted towards the Ayush sector this year will help us in bringing out cost-effective ayurvedic products to our consumers, and the funds allocated for the expansion and upgradation of Ayush institutions will aid us in leveraging R&D to the fullest, enabling us to meet the demands and dynamics of the market.