Godrej Bags Hexit Marketing Rights

Godrej HiCare, a part of the Godrej group, has struck a deal with Hoechst group major Hoechst Schering AgrEvo for the marketing rights of Hexit, the household insecticide brand. The deal is effective April 1.

As per the agreement, Godrej will market the Hexit brand and retain all the profits from the sales while Hoechst will continue to produce the insecticide. The deal does not include a buy-out of the production facilities as they are a part of Hoechsts overall agrochemical facilities.

Confirming the deal, Adi Godrej, managing director, Godrej Soaps said, We are marketing Hexit. Godrej will keep the profits from the sales of this aerosol. Adi Godrej indicated that the deal struck between the two companies was complicated. The current arrangement is neither a simple licensing nor a complete buy-out agreement, he added.

 

Godrej refused to divulge the amount paid for the deal. Talks are still going on and Godrej indicated that the brand name could be bought at a later date.

We have handed over distribution rights to Godrej for which the latter will get a distribution commission. We will, however, continue to manufacture Hexit, said K K Unni, managing director of Hoechst Schering AgroEvo. Explaining the marketing alliance, Unni pointed out that Godrej was considered due to its consumer marketing skills.

Godrej also continues to source its raw material for insecticide from Hoechst Schering AgrEvo. We have good relations with Hoechst and continue to buy our raw material from them, said Godrej.

The deal will help Godrej consolidate its leadership in the household insecticide business. Godrej enjoys a marketshare of over 50 per cent in this business. It has a marketshare of 55 per cent in the aerosol segment through its brands, Hit and Jet. Hexit is expected to increase Godrejs share in the aerosol market to 65 per cent.

Godrej has been aggressively expanding its products portfolio to counter new players in the insecticide business. In the last two years, Godrej has acquired Jet and Goodknight. The Hexit deal is primarily an extension of its line of insecticide business, say analysts.

The household insecticide market has been witnessing 30 per cent growth for the past couple of years and has attracted several players, including multinationals like Reckitt & Coleman (R&C) and Lever Johnson, a 50:50 joint venture between Hindustan Lever Ltd and SC Johnson of the US. While R&C has come out with the Mortein range of mosquito coils and mats, Lever Johnson launched its brand, Raid, last year.

Hoechst AgrEvo has decided to focus on achieving a 10 per cent marketshare in the crop protection business by the year 2000.