Mumbai: Personal care products maker Godrej Consumer Products Ltd plans to hike soap prices by 4-5%, starting April, in an effort to battle mounting raw material costs, a top official told Reuters on Tuesday.
“Vegetable oil prices have risen significantly. And now with crude prices rising because of the unrest in North Africa and the Middle East, it is possible fuel and freight costs rise so we have to keep taking corrective price hikes,” chairman Adi Godrej said.
The consumer firm has already raised soap prices by 3-5% in January, followed by a hike of 5% in September.
Prices of palm oil, a key ingredient for soaps, have been rising steadily in India, forcing many consumer companies to hike prices.
The company also plans to launch its own brand of air freshner in the new fiscal year, among various other new launches, Godrej said.
“We were licencees of Sara Lee Corp’s air freshner brand Ambi Pur, which they sold to Procter and Gamble. So we handed it over to Procter and Gamble. Now we will introduce our own brand of air freshner,” Godrej said.
Godrej Consumer, which hopes to continue announcing new buys in India and overseas in FY12, expects Rs300-400 million in revenue, from recently acquired Naturesse Consumer Care Products Ltd and Essence Consumer Care Products Ltd, which own the brands ‘Swastik’ and ‘Genteel’.
“They are small brands. We expect revenues of Rs30-40 crore rupees over this calendar year from these two brands,” Godrej said but did not reveal the cost of the acquisitions citing a confidentially agreement.
Real Estate JVs
Godrej Properties is in negotiations with various firms for jointly developing residential properties, and expects to announce a couple of them in the first quarter of FY12.
“There are no datelines, negotiations go on, we like to finalize joint ventures as quickly as possible. But there are some due diligence issues, sometimes there are legal issues...”
The joint ventures would be mainly in the residential sector, as the present demand is from this sector, he said. The realtor had earlier entered into joint ventures for construction of commercial properties.
The industry is expecting a price correction over the next 3-4 months, but Godrej Properties has no plans to cut prices.
“Nowhere in any of our projects we had to reduce the prices. We have no plans to reduce the prices, in fact, in most of our projects the prices are increasing...”
In January, Godrej Properties executive director Pirojsha Godrej said he expects the company to double sales in FY11 on strong growth across regions and segments.
“Godrej Properties is the fastest growing company in our group, and in the next 10 years it will be the biggest single business in our group,” Adi Godrej said, declining to comment on the expected sales and revenues for fourth quarter.