The Hindu Business Line : Dabur unveils roadmap to double sales, profits

Bangalore, July 24 FMCG company Dabur has unveiled its Vision 2010 plan which aims at doubling sales and profits by the end of this decade and sees health, home care, food and acquisitions as its main growth drivers.

The document says that the domestic business will contribute 84 per cent of its total sales by 2010. In the domestic market, the share of personal care will be 30 per cent of the total business followed by health care’s 27 per cent. Inorganic growth will contribute 4 per cent of the total sales of the company. The share of South will go up from 9 per cent to about 15 per cent by 2010.

For 2006-07, Dabur India net profit grew 33.3 per cent to Rs 252.08 crore while turnover rose 29.8 per cent to Rs 1,778.02 crore.

The goal of Dabur’s growth strategy is balanced portfolio. While health care’s share will go up from 27 per cent to 32 per cent by 2010, that of personal care will come down from 41 per cent to 30 per cent, that of hair care will grow from 4 per cent to 6 per cent and foods will go up from 10 per cent to 13 per cent. Interestingly, Dabur’s rural growth has outstripped urban growth in almost every category.

The company has also decided that it will use excess manufacturing capacity to generate “profitable” private business. It will identify manufacturing locations in focus countries provided it makes economic sense from a “total delivered cost” perspective. It will also study low cost sourcing options like China and focus on operational performance.

Regional branding strategy

Dabur is trying to capture market by launching products with a regional twist. It is selling Sivappu Pal Podi or local version of its popular brand Laal Dant Manjan (red tooth powder) in Tamil Nadu.

Another product Dabur Shwaasamrit, which treats breathlessness, bronchitis and cold, was recently launched in Bangalore.

The gamble has paid off for Dabur, and other FMCG companies are taking note of the strategy. “Often people treat India as one big market. But the reality is that India is more like the European Union – a mix of different cultures, languages and markets,” says Mr V.S. Sitaram, Dabur India Executive Director.

Oral care reported a 20 per cent gain in value terms and in the last quarter, home care product sales in south India accounted for nearly 20 per cent of Dabur’s national sales. Sales in South India grew 40 per cent compared with the national average of 26 per cent.

Dabur has also revamped its marketing in the South. The company is planning to make existing products more relevant to the regional consumers.

As modern trade is more visible in the region, it has set up a separate team to service the trade and sales, which have grown over 70 per cent over last year.

Dabur has also replicated the model for its Balsara portfolio. It has made significant investments on ads in various regional channels in the south for selected brands. The company is also planning to hire a few movie stars to endorse some of its brands as well.

More Stories on : Outlook | Strategy | Dabur India Ltd | Personal Products

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