Eveready to enter non-battery FMCG space

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Kolkata-based Eveready Industries is scouting for acquisitions of small regional players in the non-battery FMCG space. The 1000-crore company had set a target of a Rs 2,000-crore turnover by 2010-2011. However, Deepak Khaitan, executive vice-chairman and managing director of the company said that achieving the target would be a difficult task, unless they go in for acquisitions.

“We wanted to have revenues worth Rs 2,000 crore by 2010-11, but now I feel we will require one more year to touch that figure. Moreover, it will be difficult to meet the target unless we make some acquisitions,” he said.

Eveready has been considering small regional brands in the packet tea, mosquito repellent, and home care segment. The company wants the non-battery segment to account for 50% of its revenues in the next couple of years. As of now, the battery business accounts for two-thirds of its revenues.

Khaitan said that there are very few Indian companies that are up for sale these days. According to him, those who are willing to sell out are demanding a huge premium. “Look at what has happened in Ranbaxy’s case. We can’t give that kind of premium. We don’t have such cash flows,” he said. “We did consider some packet tea brands, but didn’t find it worth our while,” he added. In the packet tea segment the company is looking at strengthening its regional presence. “Although we have national brands, we will go regional as it is easier and cheaper to build brands at a regional level,” he said. The company is aggressively looking at targeting the markets of Orissa and Bihar for packet tea.

The company had recently launched a mosquito coil brand Poweron and is now looking at expanding its home care segment. Eveready also forayed into the home lighting business with the introduction of CFLs and strengthening this segment is also in the offing. “We have several products in different categories in the pipeline,” he said.

However, the company has no plans to launch soaps or shampoo brands, which form the core of FMCG. According to Khaitan, the company is also looking at going overseas, for which it will take the acquisition route.

Recently, Emami Ltd, another Kolkata-based FMCG company, picked up a 27.5% stake in Zandu Pharmaceutical Works and is also scouting for small regional FMCG brands.