"Our strategy has been to grow faster than the market"
WCCL's CEO Vineet Agrawal speaks to Sarat C Das about company's recent acquisition, competition with Hindustan Lever, and future plans.business Updated: Jan 02, 2008 14:35 IST
The Wipro Consumer Care and Lighting (WCCL), a part of Wipro Group, has a visible presence in the branded retail market of toilet soaps, hair care soaps, baby care products and lighting products. It is also a key player in institutional lighting in specified segments like software, pharma and retail. The company's organic growth has been led by growth in toilet soaps (Santoor), domestic and institutional lighting and their recent foray into modular furniture.
You have acquired companies such as Glucovita and Chandrika in the past and now the Singapore-based consumer care company, Unza. But since the Unza deal size was estimated at over Rs 1,000 crore, other Indian bidders like Dabur, Emami and Godrej were out of the race over valuation issues. Do you think you struck a good deal?
I don't know about the other bidders for Unza beyond what news I get from media. We wanted to grow fast in Southeast Asia, hence identified this particular company.
How is Unza, primarily known for its diversified brands in personal care products and an extensive distribution channel going to add to your portfolio while reaching out to the Indian customers?
We are supporting ourselves with detail consumer research and understanding their packaging and processing methods to find a bigger market in south Asia. Finally the product movement between the two regions is going to be a consumer driven call.
With the acquisition of companies and expanding product portfolio ranging from soaps to vanaspati how would you rival a behemoth like Hindustan Lever?
Hindustan Lever has a good management system. They certainly pose formidable competition. We match them in the soap business, and we are growing in the space of talcum powder. We are doing well within this space and we grew 15 percent last year and the profits so far are in line with the projections we have made. We would also like to constantly innovate to pose a formidable competition to a company like Hindustan Lever. At the same time I must say Hindustan Lever is also not in many segments in which we are doing well. Such as they are not in lighting or office modular furniture.
Once upon a time Hindustan Lever Group had nearly 200 CEOs and some four hundred directors. Do you think the overseas acquisition will change your management structure though may not be as elaborate as Hindustan Lever?
Well, there is not going to be much change. Our overseas entities will run the way they had been managing business until the change of ownership. Yes, some new financial accounting principles we need to follow for our book keeping.
After shampoos and oral care, FMCG companies are betting big on soaps this year. Is it true that Wipro Consumer Care, which claims to be the third-largest brand in soaps right now, is also looking at a slew of soaps launched under its Santoor and Chandrika brands?
Well, soap is key to our growth but we are not really looking to launch any more soap brand. We realise there is already a glut in this soap space and adding new brands may not help. Hence we are focusing on consolidation of existing brands.
In lighting, the commercial and institutional lighting division is reporting a huge growth in the last few years. Are you sure the growth would remain high because of the boom in commercial estate constructions and retailing?
Well, there is always going to be a boom in real estate and retailing. And we are not looking at mere short-term growth. Our strategy has been to grow faster than the market. In lighting business, we have grown 30 percent in the last few years where as the industry growth has been a mere 10-12 percent.
Many FMCG national brands derive a bulk of their revenues from certain specific regions. Is it also the case for your company?
Yes, we are much strong in South and West than North and East.
How do you plan to expedite growth in North and Eastern region of India?
Well, we have a distribution network footprint across India. Hence, we still have a good presence in North and East. We plan to come up with more innovative products to create a bigger market in North and East. We have a brand called "Santoor White" which is doing extremely well.
You served as President of Wipro Consumer Care and Lighting since July 2002 and before this also served with Wipro in other positions since December 1985. Does such a long tenure help to understand company's culture and business priority better than a new entrant?
I think both have advantages of different kinds. If you already have had a long tenure with the company you probably know the company's culture and business priority better than a newcomer. However, newcomers also bring fresh ideas to the business.
What is your current revenue and target for 2007-08?
Sorry, we don't discuss our revenue targets.