Mumbai: Personal care products maker Godrej Consumer Products plans to raise prices of soaps for the second time in 2011, by 3-5%, in an effort to battle mounting raw material costs, its chairman said late on Saturday.
“We have taken a price hike in the range of 3-5% across our soaps portfolio in January and plan another hike in the next two months,” Adi Godrej told Reuters by telephone.
Prices of palm oil, a key ingredient for soaps, have been rising steadily in India, forcing many consumer companies to hike prices in the past few days and many to consider hikes in the coming weeks.
Godrej Consumer Products, however, does not plan a price hike in its haircare or household insecticides categories.
Godrej Consumer, late on Saturday, posted a 40% jump in consolidated net profit to Rs119 crore for the quarter ended December while its net sales beat Reuters’ forecast and jumped 89% at Rs980 crore, boosted by consolidation of recent acquisitions.
A Reuters poll of brokerages had forecast a consolidated net profit of Rs129 crore on net sales of Rs957 crore for Godrej Consumer.
The numbers are not comparable with the year-ago quarter as the firm merged its household insecticides unit, Godrej Household Products, with the rest of the business and recently acquired Naturesse Consumer Care Products Ltd and Essence Consumer Care Products Ltd, which own the brands ‘Swastik’ and ‘Genteel’.
“We expect revenues of Rs300 million over this calendar year from these two brands,” Godrej said but did not reveal the cost of the acquisition citing a confidentially agreement.
Earlier in the fiscal Godrej Consumer, valued at $2.9 billion, had acquired a company in Indonesia for $270 million and paid $43 million for two firms in Argentina.
The Mumbai-based firm had also bought a firm in Nigeria.
It also bought out the remaining 51% stake in its Indian joint venture with Sara Lee Corp , Godrej Sara Lee, which is now renamed as Godrej Household Products Ltd, for €185 million.
The firm, which continues to scout for acquisitions in Asia, Africa and Latin America, expects to announce some more buys, Godrej said but refused to share details.
“If these are large acquisitions then we may have to raise funds...it will largely be debt,” he said.
Shares of Godrej Consumer Products closed at Rs401.05 on Friday, down 2.6% in a weak Mumbai market.