Apart from being a prominent player in the fast-moving consumer goods (FMCG) sector, Godrej Soaps is perceived to be engaged in unrelated activities like chemicals, properties, foods, animal feeds, medical diagnostics, and insect repellents.

``A change in the perception of the company is one of the proposals being looked at by investment bankers,'' Godrej Soaps managing director Adi B Godrej told The Financial Express.

According to Godrej, there is a perception problem for the company in the stock market, among analysts, foreign institutional investors (FIIs), traders and other outside investors, which has to be rectified to improve focus. Identifying FMCG as the core area of business for the company, Godrej said that it would work on various options to expand its activities in the sector.Godrej added that the company was also considering the option of acquisitions to grow in the sector. ``We are looking at acquisitions in FMCG, and are considering some proposals,'' he said without divulging details. He said that to solve the perception problem, the group is open to divestitures. ``Even in the past, we have divested businesses which are loss-making-for instance, the detergents business, which was sold off to Procter & Gamble,'' said Godrej.

In addition to associate company Godrej Foods, Godrej Soaps' diverse ambit of businesses include, among others, subsidiaries like Godrej Agrovet, Godrej Properties & Investments, and Godrej Plant Biotech. Godrej Soaps also has interest in joint ventures like Godrej HI Care and Godrej Pillsbury through a minority stake.

Industry observers do not rule out the possibility of the company divesting non-core businesses to focus on the core area. Besides, Godrej Soaps is looking for a joint-venture partner for Godrej Agrovet. The flagship Godrej Soapsmanufactures toilet soaps and other consumer products like hair dyes and toiletries. These are defined as hard-core FMCG products. However, notwithstanding a strong brand portfolio in toilet soaps, with brands like Cinthol, Ganga, Evita and Godrej No.1, the company's market share in the Rs 2,900-crore soaps segment is just about 8 per cent. In the hair dyes market, the company is a leader, and in toiletries, Godrej manufactures shaving creams and talcs. Soaps contribute around 30 per cent to the company's turnover, while toiletries form around 7 per cent. The company's total income was Rs 918 crore in 1998-99.

Among steps taken towards improving the company's internal perception, Godrej Soaps brought back the distribution activity under its fold from Godrej HI Care. The distribution was handed over to Godrej HI Care (then Transelektra) after Godrej Soaps restructured its joint-venture agreement with Procter & Gamble. The company has also divisionalised its consumer products division (which handles toiletsoaps, hair dyes and toiletries) from the chemicals division, each of which is headed by a president. Godrej said the measures have contributed to the company's turnaround in the first quarter of fiscal 1999-2000. The form posted a higher net of Rs 5.21 crore in the first quarter ended June, compared with Rs 1.01 crore in the corresponding period last year. ``We expect to post accelerated improvement in performance in the months to come,'' said Godrej. He said that suggestions on operational efficiency by management consultants Andersen Consulting would lead to a recurring cost saving of Rs 20 crore per annum.