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Marico posts 24 pc turnover growth

FMCG company Marico clocks a turnover of Rs 506 cr in the third quarter, thereby registering a 24% turnover growth, reports Saurabh Turakhia.

business Updated: Jan 24, 2008 23:19 IST
Saurabh Turakhia

FMCG company Marico has clocked a turnover of Rs 506 crore in the third quarter, thereby registering a 24 percent turnover growth over corresponding quarter last year. Organic growth contributed to 19 per cent, while the remainder was contributed by inorganic growth. The bottom-line recorded a growth of 62 per cent — going up from Rs 28 crore in third quarter of 2007 to Rs 46 crore this quarter.

Speaking to Hindustan Times, Marico chief financial officer Milind Sarwate said, “Our business spans across the three broad categories of hair care, health care and skin care in the beauty and wellness space.”

Talking about Kaya’s skin care business, Sarwate said, “Kaya has taken four to four and a half years to break even. Its turnover of Rs 100 crore represents 5 to 6 per cent of the total turnover, while the international business contributes close to 17 per cent. Saffola, Sweekar and other consumer products contribute to around 78 per cent of the total turnover.”

After launching Saffola cholestrol management atta mix in the functional foods business, the company has also introduced Saffola Diabetes atta mix some time back. The company has also extended the Kaya brand to introduce a chain of weight control centres, the first of which was opened some months back in Mumbai.

The name of Marico’s subsidiary would be changed from Kaya Skin Care to Kaya. Rakesh Pandey, CEO of Kaya Ltd said, “We opened one Kaya Life centre way back in June at Juhu. We intend to open more centers – one each in Bandra and Vashi.” The business should break-even by 2011, according to Pandey’s estimates.

Sarwate said that products in the functional foods business will need support and investment for at least a year before they generate profits.

The advertising to sales ratio has gone up from around 10 per cent a few years back to 12 to 13 per cent and the coming year will see the ratio being maintained at this level.

The company plans to push Saffola as a lifestyle brand and introduce newer products.

With regard to the acquisition of consumer division of South Africa's Enaleni Pharmaceuticals Limited, which was done in October 2007 for Rs 52 crore, Sarwate said that the integration process is on.

On reports that the company’s Sil brand of jam is up on sale. Sarwate said “Sil’s turnover is not more than Rs 7 to Rs 8 crore. It doesn’t contribute to more than 0.4 per cent of the total turnover of the company and too much importance is being given to talks of its sellout.”