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Mumbai-based Jyothy Laboratories has opted for a makeover of its Rs 330-crore flagship brand Ujala Blue, the first time in thirty years.
The move to recast Ujala with new packaging and price (a 75-ml bottle is now available for Rs 17) comes at a time when archrival Hindustan Unilever (HUL) has been stepping up its efforts in the laundry segment. Last year, HUL had forayed into the fabric blue space with Rin. This year, it launched a liquid detergent under Surf Excel. In 2010, the company had launched a fabric softener Comfort.
Ulhas Kamath, joint managing director, Jyothy Laboratories, says there was a need to revitalise the brand, given the competition in the space. "We did not change the packaging since its launch in 1983. We had to do it at some stage," he said.
According to industry estimates, Ujala accounts for 75 per cent of the Rs 440-crore fabric blue market. While Reckitt Benckiser's Robin Blue has a share of 3.5 per cent, HUL has a share of about two per cent. However, with HUL's distribution might, there is no preventing the company from increasing its share, analysts say. "HUL's laundry portfolio is well entrenched in the marketplace. A product such as fabric blue can ride the distribution system already in place," says Kaustubh Pawaskar, fast-moving consumer goods analyst at Mumbai-based brokerage Sharekhan.
HUL derives about 48 per cent of its annual revenues from soaps & detergents. Analysts peg the company's detergents business at about Rs 6,000 crore.
Besides revitalising its flagship brand, Jyothy Laboratories has also restructured its detergents portfolio, positioning the Ujala detergent powder as a regional brand and Henko, Mr White and Chek, all acquired from erstwhile Henkel (rechristened Jyothy Consumer Products), as national brands. Kamath said these products had been re-launched in the last few months.
For 2012-13, Jyothy Laboratories recorded revenues of Rs 1,017 crore; net profit stood at Rs 44.03 crore. Kamath says the company aims to increase its turnover to Rs 3,000 crore in the next three years. "The merger of Jyothy Consumer Products and Jyothy Laboratories has been approved, from April 1 2012. So, the books of account would be one and, of course, we would benefit from the synergies the two companies bring to the table," he said.
The company also plans to reduce debt, which currently stands at Rs 542 crore. "In the next few days we will launch a bond issue, the proceeds of which would be utilised to reduce debt," Kamath said.
Jyothy Laboratories is likely to launch new products in the personal care segment. Currently, its brands in this space include Neem, Margo and Fa.
