Emami planning to sell She Comfort
In recent analysts' meet that Emami had written off all its investments in the sanitary napkin business and was looking for a buyer for She Comfort, says Mohan Goenka
Kolkata: Consumer goods maker Emami Ltd has stopped investing in its sanitary napkin business and is looking to sell its She Comfort brand after acquiring it for an undisclosed sum in June 2014.
Executive director Mohan Goenka said in a recent analysts’ meet that Emami had written off all its investments in the business and was looking for a buyer for She Comfort. However, he later added: “We will wait for a while, as internally we are in two minds."
Though Emami never gave numbers, analysts estimate the brand to have cost around Rs25 crore when Emami acquired it from Mumbai-based Royal Hygiene Care Pvt. Ltd. Its sales at that time were estimated at Rs22-23 crore a year.
At the beginning of the current financial year, Emami said sanitary napkin categories were expected to grow “exponentially" because of increasing awareness and affordability.
The market for sanitary napkins remains small at Rs2,500-2,800 crore and largely concentrated in cities. Only 9% of India’s women use sanitary napkins, according to Emami’s own estimates. The rest use cheaper substitutes.
But Emami failed to expand the market. She Comfort is not even sold nationally—sells only in a “few pockets" of south India, according to an analyst who asked not to be identified.
In a call with analysts last year, Goenka said Emami was test-marketing She Comfort in Andhra Pradesh, and that his company was still trying to understand the nuances of this business. Emami didn’t ever get to the stage of investing big sums into the business, said the analyst cited above.
To be sure, the sanitary napkin market in India is small and dominated by international consumer goods behemoths such as Procter and Gamble Hygiene and Health Care Ltd, Hindustan Unilever Ltd and Johnson and Johnson Pvt. Ltd.
There is an opportunity to expand sales in the rural market, but changing mind-sets is difficult, said the analyst cited above, adding that even the leaders in the business are struggling to make inroads into the rural market. And within the existing consumer base, it is “very difficult" to get people to switch to new brands.
Naveen Trivedi, an analyst at HDFC Securities Ltd who specialises in consumer goods, said She Comfort isn’t too critical within Emami’s large portfolio of businesses, and it is good that the company is looking to move on. Strategies change with time, and it helps to take “tough calls" at the right time, he said, clarifying that he doesn’t track Emami closely.
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