The Hindu Business Line : Marico to invest Rs 150 cr; may acquire more brands

The company has already made its first acquisition abroad last week with the purchase of two soap brands from a company in Bangladesh. "Most of the investment will go towards setting up a new corporate office and expanding our skincare services," the Chief Financial Officer, Marico Ltd, Mr Milind Sarwate, told Business Line.

He said the company, which makes Parachute hair oil and Saffola refined oil, is also looking at acquiring brands in the consumer and skincare products. This is part of the company's target to achieve over Rs 2,000 crore in four years. "But the focus will be more on inorganic rather than organic growth," he said.

Mr Sarwate said Marico last week acquired Camelia and Aromatic Soap brands from a company in Bangladesh. He said the company could look at introducing extensions of its existing brands soon.

He said a baby oil product is currently being test marketed in Hyderabad.

Among the 12 brands, Mediker was acquired from P&G and Oil of Malabar from a Bangalore-based company.

Mr Sarwate said the company also plans to open at least 20 more Kaya skin clinics in India. There are currently 39 such clinics including two in Dubai.

He said exports constitute 10 per cent of its total revenues and is expected to go up to around 20 per cent when its revenues cross Rs 2,000 crore.

Marico is also planning to sell its products in more countries in the Gulf and in certain South East Asian countries. He agreed that some of the products likeOil of Malabar were laggards in sales but there are no plans to take them out of the portfolio.

"Some of our products are flanking brands and serve a certain purpose and hence there are no plans to drop them," he said.

Among the 12 brands, Parachute, Saffola, Kaya, Revive, Medicare and Hair & Care were high margin brands while Sweekar, Oil of Malabar and flexipack of Parachute were low margin brands.

Mr Sarwate said though no brand valuation of Parachute, the company's largest selling brand, had been carried out, it contributed more than 45 per cent of the total sales of the company.

For 2004-05, Marico's net sales were Rs 937 crore while the net profit was Rs 73.79 crore.

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Marico to invest Rs 150 cr; may acquire more brands