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FMCG stayed in the fast lane

FMCG stayed in the fast lane
PTI
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First Published: Wed, Dec 24 2008. 06 12 PM IST
Updated: Wed, Dec 24 2008. 06 12 PM IST
New Delhi: True to its name, the fast moving consumer goods industry remained on the fask track in 2008, as the rising input costs, high inflation rates or the economic downturn failed to hinder the pace of activity in the sector.
As per a study by industry chamber Ficci, FMCG industry is projected to grow by 16% to Rs95,150 crore during 2008-09, up from Rs85,470 crore last fiscal, amidst rising raw material prices, increase in costs of various inputs like petro-based raw and packaging materials, and above all, that of key ingredient -- palm oil.
The year also saw FMCG growth in rural market overtaking that of the urban market. While the sector maintained a 17-18% growth in the urban market, this year, according to industry estimates, the rural market showed over 20% growth.
Ficci had said, about 35% of the off-take for FMCG products come from rural areas, and the affluent segment in villages grew at a faster rate than the urban one. The estimated number of households using FMCG products in rural India have grown from 13.6 crore in 2004 to 14.3 crore in 2007. FMCG products continued to show good momentum aided by buoyant demand in rural markets worth Rs27,369 crore.
Perhaps, these were the reasons for major players like Nestle and Pepsi to announce multi-million dollar investments in India as they sought to consolidate their positions. While Nestle planned to pump in Rs600 crore in 2009 to augment research and development, advertising and capacity building, soft drinks major PepsiCo announced plans to invest $500 million dollar in the Indian market over next three years with the aim of tripling the company’s business in the country.
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First Published: Wed, Dec 24 2008. 06 12 PM IST