Parting Ways With P & G Was The Best Option: Godrej

Addressing anxious shareholders, Godrej said: Last year, P&G took a global decision to concentrate on four areas of business - laundry detergents, paper products, hair-care and pharmaceuticals. The toilet soaps business, the segment where our joint venture was operating, was not on their priority list. Hence, we thought it was best for both of us to part ways. The 3-year deal with P&G has, however, taught us a lot and we will build ourselves from there, Godrej added.

The company's main soaps business was also affected since the management was thinking of splitting with P&G for several months before it actually did so. After the split, the company will now market all its products and relaunch the Ganga brand soon.

 

Godrej also took the opportunity to clarify the reasons for low volumes of production achieved by the company during 1995-96. He explained that this was mainly due to high fatty contents in the products. The fatty contents have gone up from 50 per cent to 76 per cent, which is much higher than our competitors.

This has resulted in increase in value terms though volumes have dropped to two-third of the original, said Godrej. In the first four months of the current year, sales income grew to Rs 276.50 crore as against Rs 208.91 crore in the corresponding period last year.

When queried on the investments made in Transelektra (rechristened Godrej HIcare), Godrej said this was done as the company was on the fast-growth track. The company's turnover, he said, has doubled and it enjoys a 50 per cent market share in the household insecticide business.