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GCPL earmarks up to $1 bn for acquisitions in emerging markets

GCPL earmarks up to $1 bn for acquisitions in emerging markets
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First Published: Sun, May 03 2009. 11 55 AM IST
Updated: Sun, May 03 2009. 11 55 AM IST
Mumbai: FMCG major, Godrej Consumer Products Ltd (GCPL), is eyeing acquisitions in emerging markets and has earmarked up to $1 billion for the purpose in the current fiscal, a top company official said.
“We are looking at acquisitions worth up to $1 billion. The ideal range (acquisition price) would be around $ 50-100 million. We are open to acquisitions that are synergistic and accretive to our growth,” Godrej Group Chairman, Adi Godrej, told PTI here.
The acquisitions would be funded largely through internal accruals, Godrej said.
The soap and hair colour-maker has been monitoring international market conditions closely and is understood to be scouting for opportunities in China, Brazil, Indonesia, Philippines, Thailand, Egypt, South Africa and Mexico.
With an export portfolio covering 30 countries, GCPL’s product line consists of soaps, detergents, hair colour, fabric cleaner, shaving cream and deodorants, among others.
In 2005, Godrej bought UK-based personal-care products firm — Keyline Brands — followed by two South African hair product firms — Rapidol and Kinky — in 2006 and 2008, respectively.
“25% of GCPL’s revenues come from outside India,“ Godrej said.
He expected the consumer durables segment to fare well and said that it would be a key growth driver for the group in FY 10.
“The rural FMCG market is growing handsomely. It is, in fact, growing faster than the urban market due to various measures taken by the Government. We’ll be setting up more retail outlets to enhance our distribution reach to capitalise on this,” Godrej said.
The BSE-listed firm posted a consolidated net profit of Rs172.6 crore in FY 09, up by 8% over the year-ago period.
Driven by higher sales in the soaps segment, consolidated net sales shot up 26% to Rs1,392.9 crore for the same period.
“Our soap business has generally done well. We got value for money because commodity prices came down. Besides, there was easing in other factors like freight, fuel, excise duty,” Godrej said.
GCPL continues to be the second-largest toilet soaps player with a market share of 9.9% in Q4 FY 09.
”There was some pressure on our margins in the first three quarters of this fiscal, but GCPL bounced back to strong levels in the last quarter,“ he said.
Although no new brands will be launched this fiscal, Godrej said the company planned to introduce at least five new product variants.
Godrej said the group’s chemicals business, looked after by Godrej Industries Ltd, did not do well in 2008-09 because of high commodity and vegetable oil prices.
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First Published: Sun, May 03 2009. 11 55 AM IST