Southern Africa new Darling in Godrej’s overseas affair
Lalitha Srinivasan, Financial Express, 18 November 2014
After increasing its stake to 100% in African hair care firm, Darling Group Holdings, in Ghana last month, Godrej Consumer Products (GCPL) is planning to up its stake in Darling Group’s business in other South African countries.
The company has just picked up 51% in Darling Group’s operations in Uganda, Tanzania and Angola. At present, Darling Group Holdings operates in 14 countries across Africa. As part of its inorganic growth strategy, GCPL, part of the Rs 25,000-crore Godrej Group, is scouting for acquisitions in Africa and South America. Betting big on innovations, GCPL has doubled its R&D spend this fiscal and is moving into a new research and development centre in Mumbai.
With an investment of Rs 100 crore, GCPL is setting up a new plant in Jammu to manufacture insecticides and hair colour brands.
On GCPL’s overseas plans, Adi Godrej, chairman of GCPL, said, “We are looking for acquisitions in developing countries such as Africa and South America in the home and personal care business. After increasing our stake in Nigerian and South African brands of Darling Group, we will be increasing our stake in the group in other South African countries. We have added new countries in Darling Holdings’ operations, which include Uganda, Tanzania and Angola.”
In June 2011, GCPL had acquired a 51% stake in African hair care company, Darling Group Holdings, for an undisclosed amount.
On GCPL’s organic growth plans, Vivek Gambhir, managing director of GCPL, said the Rs 7,800-crore company is expanding its manufacturing capacity in Guwahati.
“We have doubled our R&D spend this fiscal. In January 2015, we are moving into a new premise, which has 50% more space for R&D activities. We have set up sophisticated modern labs for research activities,” he added.
To reach out to a wider audience, GCPL is increasing its distribution network by 10 % this fiscal. With the softening of input costs, GCPL is planning to pass on the benefit to consumers in the form of consumer promotions. “We are looking at better consumer promotions. Our top priority now is to stimulate consumer demand,” said Gambhir.
According to Gambhir, GCPL is betting on sales initiatives and innovative products to drive volumes in the next two quarters. As part of its sales strategy, the company is launching a slew of initiatives, including an additional layer in its sales force called ‘pilot sales representatives’ (PSR) and ‘project daksh’, to improve sales performance. To gain visibility for its brands, GCPL is planning an increase in advertising spend in the next two quarters.