New Delhi: The Indian economy may be reeling but consumer goods companies say they remain optimistic. Despite a steep increase in the prices of raw materials, the sector recorded an impressive growth during the quarter ended September.
Reckitt Benckiser India Ltd, too, has had a good run this year and the company hopes to close the current fiscal with a 20% growth in sales. The company, which owns brands such as Dettol, Harpic, Mortein, Cherry Blossom and Strepsils, is also planning to bring more of its brands to India, says chairman and managing director, Chander Mohan Sethi in an interview. Edited excerpts:
Healthy demand: C.M. Sethi.
Do you think the global meltdown would impact consumer demand and derail the growth this sector has seen in the past few quarters?
I have not seen any change in consumer demand as a result of the global turmoil in the past three-four months. The situation, however, is going to be uncertain for the next two-three quarters. Some economists are saying the situation could be serious for the next 18 months to five years. (The) sector’s growth will partly depend on the actual economic depression and more on the consumer sentiment. As far as the consumer goods are concerned, the sentiment hasn’t impacted the demand yet.
Also, it’s those businesses that need large investments and those that are having to take funds from banks, which will be impacted the most by the current slowdown. As far as the sector is concerned, it pertains to everyday needs of consumers. Obviously, that’s a spend that will be cut only under extreme circumstances. And we haven’t seen that happening yet.
As far as we are concerned, we are sure we will grow at least 20% this year.
Most companies resorted to price hikes in the recent months to offset rising commodity prices. Will we see prices getting stabilized any time now?
So far, we have passed on only 25% of the total cost increases to the customers. I would be very cautious on price increases. However, future price hikes will depend on economic conditions and commodity prices.
Any plans to enter new product categories in the near future?
We have recently launched four power brands from our global portfolio in India. These include dishwasher Finish and air freshener Airwick. The launch of a new brand requires a lot of investment. We will launch new products but the timing would depend on the right time.