Earlier preceived merely as a ``chyawanprash and churan'' manufacturer, the Rs 800-crore company is now being seen as an FMCG major. The recast began after the company hired McKinsey & Co and decided to focus on its core competence. Dabur has narrowed its focus to three core areas of strength -- healthcare, personal care and food processing. Dabur has a product portfolio of which eight brands have a market share of over 65 per cent.

According to analysts, in fiscal 1999 the company is likely to post a 15 per cent growth in turnover and five per cent growth in net profit. For fiscal1998, the company reported a net profit of Rs 44.39 crore on a turnover of Rs 824.8 crore. This year, the lower growth in profits will be mainly on account of the company incurring higher advertisement expenditure. In the first six months, the company's advertisement expenditure was higher by 70 per cent.

This restructuring move should be welcomed by the market as building up brands always pay in the long-run. In line with the trend, Dabur India is also open to the idea of acquiring brands which can add value to its portfolio. These brands could belong to mid-sized companies or even multinationals who are divesting as part of their global restructuring. At present, company officals rule out any such possibility as Dabur is in the process of consolidation.

The comapny will also be utilising the funds generated through hive-offs for this purpose. Dabur has sold its 49 per cent stake to Agrolimen of Spain, its partner for manufacturing bubble gums and candies, for Rs 40 crore. For its joint venture formarketing bakerey products with Osem in Israel (which has been recently taken over by Nestle Spa), the company has decided to dilute its stake to 40 per cent from 60 per cent. The logic being that Nestle, which has greater experience in marketing bakery products in India, should lead the venture. In the thrid joint venture with Bongrain of France for manufacture and sale of cheese and other dairy products both partners will hold 50-50 per cent.

The company has also reduced its exposure to Dabur Finance, where it held 90 per cent stake. The finance arm has sold its retail business to Birla Global Finance for around Rs 12-15 crore and has stopped accepting fresh deposits. Dabur is also scouting for a buyer for its Rs 13 crore natural gums division. According to market sources, the company in currently in talks with three parties for the sale and the deal is likely to be finalised in the next couple of months.

The company's growth in the short run is likely to come from the health care business whichcomprises of brands like Chyawanprash, Hajmola and Pudin Hara (accounts for 36 per cent of the company's total sales), the personal care business, of which oral care is an integral part, would be a money spinner accounting for more than 40 per cent of total sales.

Over the next three years, Dabur will spend close to Rs 60 crore in advertising alone in foods, besides an additional capital investment of Rs 20 crore. Under the food processing division the company is marketing fruit juices (`Real') and a range of pastes and culinary products. The division is likely to break-even by fiscal 2001.