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| Harsh Mariwala: On the fast track, with
a wider portfolio of brands |
For
some time in the late nineties, a rumour persisted in Mumbai market
circles that fast-moving consumer goods (FMCG) Goliath Hindustan
Lever Ltd (HLL) was in the mood to gobble up Marico, a marketer
of hair oils and edible oils. It didn't sound like idle gossip;
HLL in those days was galloping at double-digit growth rates fuelled
by a rash of acquisitions, and Marico on the other hand was so
low-profile that consumers would find it difficult to believe
that such best-selling brands as Parachute (hair oil) and Saffola
(edible oil) did indeed belong to Marico (and not to HLL). So
pretty much everybody who mattered believed there was some truth
to the acquisition story. Except of course Harsh Mariwala, Chairman
& Managing Director, Marico: "I had to keep hearing that
"we were going to be swallowed by Levers, and that might
have had to do with our cautious and conservative approach."
Cautious he still is, but over the recent
past Mariwala has picked out a trick or two from the HLL book
on the M&A front, which culminated in Marico buying a Lever
brand, Nihar, early in the year for a total consideration of Rs
216 crore. The price Mariwala paid for the hair oil brand isn't
as important as the underlying message in that acquisition: That
Marico is doing just fine on its own as an Indian FMCG major,
and is hungering for growth, which has anyways been coming in
double-digit torrents in recent years. Last year, Marico crossed
the Rs 1,000 crore barrier, and the CMD expects to do Rs 1,150
crore in the current year on a consolidated basis. "The target
is Rs 2,000 crore in three years," mutters Mariwala in his
typical understated manner.
| ...Marico Is Trying To
Shed Its Conservative Image With... |
» A
corporate campaign highlighting a new-look company, the aim
being to attract FMCG talent
» A successful
entry into services, with Kaya Skin Care, which has now gone
international
» A foray
into new product categories like baby oil, displaying an eagerness
to take on MNCs
» Innovative
rewards to shareholders like quarterly dividends and bonus
redeemable preference shares
» A buyout
of a brand from HLL, a company that once looked to buy out
Marico, lock, stock and barrel |
Mariwala will also tell you that his company-he
holds 66.62 per cent of the equity (with the Indian promoters)-should
have hit Rs 1,000 crore in 12 years instead of the 15 it took
to progress from Rs 100 crore. He's unlikely to have such regrets
in the years ahead, though. "We will surely have a wider
portfolio with more brands (in 7-10 years). Nihar (coconut and
perfumed hair oils) is expected to add 10 per cent to Marico's
turnover at one go. "We are strong in the south and the west
but weak in the east. Nihar, which is strong in east India, will
give us a big presence in that region," points out Saugata
Gupta, Chief (Marketing). Acquisitions are also helping Marico
increase its overseas presence. "From about 10 per cent of
our turnover last year, we are looking at this hitting the 12
per cent mark this year. The target is to hit the 20 per cent
mark over the next five years," says Mariwala.
In the meanwhile, Marico is doing its bit
to test out new extensions. "While the overall focus will
be on beauty and wellness, we will also look at contiguous categories,"
says CFO Milind Sarwate. Among the new launches are a hair cream
for men (Aftershower), Sparsh (a baby oil which has ingredients
like tulsi), and Saffola atta mix.
Be it low price points, or tamper-proof packaging,
Marico has been at the forefront of innovation. Even, of late,
on the communication front. Example: A striking (and cost-effective)
promotion of a line extension-Saffola Gold-involves an apparently
overweight radio jockey. Every kilo lost by the RJ only solidifies
Saffola's perch on the health platform. And Marico's pride of
place amongst Indian FMCGs.
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