After restructuring the strategic alliance of Godrej Soaps with Procter & Gamble in 1996, the distribution of toilet soaps, toiletries, detergents had been undertaken by Godrej HIcare with effect from September 15, 1996. Subsequently, the distribution arrangements were modified and Godrej HIcare was appointed as the selling and collection agent for the company's consumer products. Godrej HIcare was the subsidiary of Godrej Soaps Ltd in 1996.

However, last year it ceased to be a subsidiary company after the sale of Godrej Soaps' 11 per cent stake to its joint venture partner Sara Lee. sara Lee now holds 51 per cent in Godrej HIcare.

Adi Godrej told theshareholders, "We will be undertaking a restructuring exercise for the business to overcome the slowdown in profitability."Elaborating on why the business did not fare well last year, Godrej said that 1997-98 was the first year after restructuring of its alliance with Procter & Gamble, when marketing and distribution activities were reverted back to the Godrej group. Godrej HIcare was given the mandate to distribute Godrej's products while marketing was retained by Godrej Soaps. "The company faced a rough time last year as we had underestimated difficulties, we would face in achieving the task of reviving the brand," admitted Godrej.

Godrej Soaps has registered a 13 per cent growth in sales in the first five months of the current fiscal over the corresponding period last year. The company registered a turnover of Rs 775.6 crore in 1997-98. Godrej Soaps posted a lower net profit of Rs 8.5 crore in 1997-98, against Rs 25 crore in the previous year.

Godrej Soaps chairman SP Godrej reiterated that 1997-98was not a good year due to various reasons and the company is undertaking the restructuring exercise to improve sales.

On the economy front, Adi Godrej said it will be very tough. "I do not think we are going to get any help from the economy. Profitability will come only from efficiency," he said. The contribution of soaps to the total income is 38 per cent, while that of chemicals is 26 per cent. The company has a market share of 8 per cent in the toilet soap segment and 30 per cent in chemicals.