Emami to start producing Kesh King from its own plant

The hair oil was earlier sold by former owner SBS Biotech, on wholesale basis, leading to stocks piling up in the market

With the alleged higher stock inventory of Kesh King waning for retailers and wholesalers after Emami Ltd integrated the product under its own distribution model, the company will start production of the hair oil from its own plants across India by May.

The hair oil was previously distributed by SBS Biotech, the brand’s former owner under a wholesale system that had allegedly led to stocks piling up in the market — something that took the Kolkata-based Emami months to figure out.

Operating under an outsourced manufacturing model, Kesh King continues to be produced from SBS Biotech’s plant in Sirmour, Himachal Pradesh. Emami had, however, gone slower to roll out further packages to clear off the inventory first.
 

“We’ll start manufacturing it from our existing own plants within two-three months. The test runs conducted previously have been successful,” the company’s CEO of finance, strategy and business development, Naresh Bhansali, told Business Standard.

In June 2015, Emami had acquired the entire Kesh King portfolio including all assets, rights and liabilities along with the working capital from SBS Biotech, the brand’s former owner, for a gross amount of Rs 1,651.

However, acquisition of SBS Biotech’s plant in Himachal Pradesh was not part of the deal resulting in SBS Biotech continuing to produce the hair oil under the FMCG company directive.

Emami has seven plants across Assam (Guwahati), Uttarakhand (Pantnagar), Gujarat (Vapi), Dadra and Nagar Haveli (Massat), Maharashtra (Dongree) and West Bengal (Kolkata) and one in Bangladesh from which it caters to the entire domestic and export demand.

Our third plant in Guwahati will be operational by October,” Bhansali said.

Build at a cost of Rs 200 crore, an investment in excess of Rs 100 crore has already been made in the current fiscal to set it up. “This plant will add to our capacity to produce cream, lotion, oils and other products,” he said.

The FMCG company will be having a capex of Rs 150 crore during 2016-17.