Godrej Consumer Products Ltd (GCPL), a group company of the Rs 12,000-crore corporate conglomerate, Godrej is keeping its “eyes and ears open” for any further mergers and acquisitions across the continents of Asia, Africa and Latin America.
The company over the last eighteen months acquired five companies at a net expenditure of R3,000 crore feels buyout of firms would continue to be an option for it to expand its footprint in international markets.
“Mergers and acquisitions is a major part of our growth strategy and we always keep our eyes and ears open to acquire a company that is a strategic fit for us,” A Mahendran, managing director of GCPL told Hindustan Times.
Mahendran said the company’s sweet spot for an acquisition ranges between $50 million (Rs 240 crore) to $250 million (Rs 1,200 crore).
Over the last couple of years major acquisitions of GCPL include Indonesian household product firm Megasari Group, Argentine hair colour brand Issue Group. In June this year, GCPL bought 51% stake in Darling Group—the African hair products firm for $100 million (Rs 480 crore).
These buyouts are in sync with GCPL’s 3 by 3 strategy whereby the company wants to increase its presence in emerging markets across Asia, Africa and Latin America through its three core categories—personal wash, hair care and home care.
The company owns household insecticide brands such as Good Knight and HIT and Cinthol soap, among others.
“We want to take our technical expertise to other global markets as the global market potential across these categories is immense,” said Mahendran.
The household insecticide market in India is around Rs 3,000 crore while globally it is estimated at $6 billion (Rs 28,200 crore). Hair colour market globally is around $10 billion (Rs 47,000 crore) while in India it stands at around Rs 1,500 crore.
Similarly, personal wash, which includes soaps, is estimated to be around $12 billion (Rs 56,400 crore) globally while in India it is Rs 10,000 crore.
“GCPL already is a major player in all these categories in the country and it is pertinent for us to take our technical expertise to other international markets,” said Mahendran.