Piramal unit eyes OTC brand buyouts

Consumer products division plans to expand to 1,500 towns in the next year from the present 481, and aims to touch revenue of Rs.1,000 crore by 2020


Piramal Enterprises has made two acquisitions in the OTC space since 2010—the buyout of skincare brand Caladryl from Valeant Pharmaceuticals in 2013 for an undisclosed amount and Cipla Ltd’s i-pill in 2010 for Rs95 crore.
Piramal Enterprises has made two acquisitions in the OTC space since 2010—the buyout of skincare brand Caladryl from Valeant Pharmaceuticals in 2013 for an undisclosed amount and Cipla Ltd’s i-pill in 2010 for Rs95 crore.

Bengaluru: The consumer care division of Piramal Enterprises Ltd is scouting for acquisitions to expand its portfolio.

The owner of over-the-counter (OTC) brands such as Lacto Calamine, Saridon and i-pill is in discussions with domestic firms for buying out brands in areas of healthcare, personal care and children’s wellbeing, said Kedar Rajadnye, president and chief operating officer, consumer products division, Piramal Enterprises.

“We are looking for brands with a potential to become No. 1 or 2 in their respective categories with a revenue in the range of Rs.25-100 crore,” he said.

The division, with revenue of Rs.400 crore in fiscal year 2015, plans to expand to 1,500 towns in the next year from the present 481, and aims to touch revenue of Rs.1,000 crore by 2020.

Piramal Enterprises has made two acquisitions in the OTC space since 2010—the buyout of skincare brand Caladryl from Valeant Pharmaceuticals in 2013 for an undisclosed amount and Cipla Ltd’s i-pill in 2010 for Rs.95 crore.

Piramal Enterprises entered the OTC space with the acquisition of Saridon from Swiss firm Hoffmann La Roche and Lacto Calamine from Duphar-Interfran Ltd in the early 1990s. Later, the group entered joint ventures with Reckitt Benckiser Plc and Boots Healthcare International to bring their OTC range to India. In 2007, Piramal Enterprises decided to go independent with its own consumer products division after Reckitt acquired Boots in 2006.

Nandini Piramal, daughter of Ajay and Swati Piramal, leads the OTC business of the company. She is also an executive director on the Piramal Enterprises board.

The business has grown to Rs.400 crore in the past seven years with a product portfolio of about 10 brands, including Lacto Calamine, Saridon (analgesic), Supractiv Complete (nutrition supplement), Polycrol (antacid), i-pill (emergency contraceptive), i-can (pregnancy kit), Jungle Magic Perfumes (perfumes for children), Tetmosol (scabies treatment soap) and Triactiv (anti-bacterial soap).

“The OTC market is an attractive market for companies as it is non-regulated, unlike the pharmaceuticals market. However, it’s a time-consuming process to build a brand as well as a strong distribution network. Acquisitions help the buyer to quickly overcome these difficulties and open up a large market,” said Vineet Toshniwal, managing director, Equirus Capital Pvt. Ltd.

The consumer care division has big expansion plans. “So far, we are present in towns with a 1 lakh population. Now, we plan to enter towns with more than 20,000 population. We plan to expand our reach into 1,500 towns in the next year,” Rajadnye said.

According to him, the division has a four-pronged strategy, going forward to 2020. Besides expanding into new geographies and acquisitions, brand extension and launching new brands are part of the plan.

In 2013, Piramal Enterprises extended the Lacto Calamine brand with the launch of anti-aging cream Lacto Calamine Reneu.

“There are about seven-eight purely OTC companies in India. Their revenues depend mainly on one-two brands while the rest of the brands remain idle in the product basket. We don’t ever want to be in such a position. We want each of our brands to be number one or two in their category. We are looking for about four-six launches every year,” he said.

The new launches will largely be in area of self-care. Compared to markets such as the US and UK, there is no market for self-care OTC products in India. However, in the backdrop of increased number of diabetes patients, there is huge potential for self-care products in India, Rajadnye added.

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