Small Business'The year ahead looks good with Sara Lee's consolidation'
What would you attribute the good results to?
There are three things that happened this quarter. First, the appointment of a new managing director, Dalip Sehgal. Second, some very focused steps which have seen our marketshare increase in every area that we operate in. In soaps, for instance, our marketshare increased from 9.8 per cent from 9.1 per cent in Q1. The hair colour business grew at 20 per cent, close to 6 per cent more than the industry growth rate. Last, but not the least, our margins have improved by 600 basis points, primarily due to lower input costs and cost-cutting measures.
No, we will not consider a complete merger. The Godrej Sara Lee joint venture with GCPL will give it a larger portfolio, larger revenues, improved earning and excellent growth opportunities.
What about the consolidation of operations for sales and distribution of the FMCG JVs?
The individual FMCG entities will have their individual sales and distribution forces and go to market strategies. What we had formed last year was a study group to synergise the modern retail and rural trade channels and learn from the strengths of group companies in these areas. However, the individual companies will have their own modern and rural distribution and marketing forces.
If Sara Lee’s consumer goods business is acquired by an international FMCG player, what course of action will you follow?
This entirely depends on the acquiring company. Most of the brands under the JV belong to the joint venture and a few belong to Sara Lee. We would keep our options open, including the acquisition of the joint venture’s operations in India.