Continuing to ride on an aggressive acquisition strategy, Wipro Consumer Care & Lighting (WCCL) has made inroads in the South African market, with the buyout of the country’s flagship personal care company Canway.
This is the 12th acquisition for the Bengaluru-headquartered firm in 16 years. It has spent close to $950 million in acquisitions so far.
“For us, it is a good entry as South Africa has the second largest GDP in Africa and it has the largest personal care market in the continent,” said Vineet Agrawal, chief executive officer (CEO), WCCL. The consumer care company so far has had a muted presence in Africa, with its iconic Santoor brand sparsely available in Egypt and Sudan.
With this acquisition, WCCL gets access to Canway’s brands such as Oh So Heavenly, present in the bath and hand creams segment, IQ, a derma skin care brand, Iwori, an organic brand, and Dr Sole, which is into foot care.
As part of the deal, WCCL will also acquire the manufacturing facility of Canway located in Durban. The Canway brands, valued at $21 million in terms of sales, are exclusive to a health and beauty chain called Clicks, and constitute 30 per cent of the South African personal care market.
“The Clicks brand is also present in other countries such as Namibia, Seychelles, and Ghana, and as Clicks expands Canway will also expand with it,” said Agrawal, adding the acquisition gives the company advantage to Canway products in other parts of the world. WCCL is also evaluating to bring the product portfolio to India.
Going forward, Agrawal said around 55 per cent of the company’s revenue will come out of the international portfolio soon. The international markets constitute around 51 per cent of the company’s total revenue currently.
In fact, the international business that the consumer care arm of the billionaire Azim Premji-led Wipro Group has created, practically all of it is based on acquisitions.
Agrawal said the fact that how well the acquisitions have grown gives the consumer care arm confidence to go ahead and acquire more companies. “Unza has grown 3.2 times, Yardley 3.8 times and Chandrika five times, since they have been acquired,” said Agrawal. Acquisition of Singapore’s Unza Holdings for Rs 1,000 crore was the company's largest deal in 2007.
This is the second international acquisition in a year for the Yardley deo maker. In April this year, it had acquired Philippines based personal care company Splash Corporation for $80 million after a pause of three years which gives it access to new categories such as skin exfoliate and hair conditioners. Malaysia continues to be its largest global market with a revenue contribution of over $140 million, followed by China and Vietnam.
It is setting up a manufacturing plant in China, which is WCCL’s first greenfield plant outside India and signals the importance the firm ascribes to the neighbouring country. What has helped WCCL in scaling up in the highly-competitive China market is its unwavering focus on localisation. It has 3,000 employees in China, which accounts for roughly 30 per cent of the company’s 10,000-odd global workforce. While China, Vietnam and Indonesia continue to grow at a double digit rate for WCCL, Malaysia has been witnessing a single-digit growth rate.