Reckitt To Launch Dettol Prickly Heat Powder

It may be a prickly summer for talcum powder brands like Nycil, Boroplus and Dermicool, for, Reckitt & Colman India Ltd (RCIL) plans to launch its own prickly heat powder under its key brand, Dettol.

The product will be launched first in southern India, which is the country's most vibrant market for talcum powders. Few weeks later, Dettol powder will be introduced in the rest of the country, followed by an aggressive advertisement campaign.

Dettol prickly heat powder will be launched through the Reckitt Piramal joint venture which markets Dettol and Disprin brands through the pharmaceutical channels in addition to the regular FMCG distribution chain.

The Reckitt Piramal marketing joint venture registered a 21.5 per cent sales growth by focusing on the pharmaceutical channel which was not available to RCIL before.

Meanwhile, buoyed by its success with the recently-launched perfumes under the well-known Wizard brand, RCIL plans to focus on another area, the household air freshners business. Though its earlier experiment with Haze air freshners was quite unsuccessful, a company official says the market was not ready for it.

In the year ended December, 1999, RCIL did not do well, though for most other fast-moving consumer goods majors, like Nirma and Hindustan Lever Ltd, it was a pretty decent year. Though RCIL's turnover grew by about 16 per cent to Rs 504 crore, the company's profits dipped by over 50 per cent to under Rs 15 crore. The company management offers several explanations for its lower post-tax profit this year: hike in excise duty, premature pay-off of non-convertible debentures etc. However, officials claim that the company has spent heavily on its brands _ promotion, marketing, expansion.

RCIL's advertising expenses rose by over 50 per cent during the year, and the management headed by chairman Pranab Barua, intends to continue investing heavily in the brands during the current year. The company officials say, it has focused on long-term needs and fruits of these investments might not be realised very soon.

However, as soon as the company's first quarter results _ showing a reversal _ were available, its management adopted a new line: "Our investments seem to be paying already".

RCIL's products are facing stiff competition in every segment: Dettol soap, though ahead of its contenders, faces tough competition from Savlon soap; Robin Sunglo, a fabric whitener, has to share its market with its strong competitor Ujala.

Diversification is the key to existence in dog-eats-dog competition. "Look at HLL, and look at Colgate _ the difference is too obvious to be explained," says a stock market analyst, adding that for RCIL to stage a come back, it needs to diversify.

A prickly heat powder from Dettol, given the strength of its brand, could get a warm reception. The company is, indeed, investing heavily on its brands and the sales are growing. But the growth must reflect in the company's profits and heal the company's injured bottomline.