FMCG company Jyothy Laboratories (JLL) is looking for acquisitions in the branded fabric care and household insecticide sectors in India to drive its sales performance. The company is in advanced talks with two regional players in these sectors to sustain its growth momentum this fiscal. Ullas Kamath, joint managing director, Jyothy Laboratories, is drawing up a fresh game plan to fight competition which includes revamping manufacturing operations, a power-brands strategy and brand extension. In an interview with FE?s Lalitha Srinivasan, Kamath talks about the company?s growth plans. Excerpts:
What are your acquisition plans for this fiscal?
We are looking at acquisition of strong regional players in the fabric care and household insecticides segments. We are currently in talks with two regional players. We are not looking at any buys in overseas markets. We acquired Henkel India in May 2011.
Do you plan to revamp your manufacturing operations?
We have shut two manufacturing facilities in Chennai and Bhubaneswar. We have integrated these operations with our facilities in Uttarakhand and Pondicherry as part of our consolidation drive. With this move, we get tax benefits too.
Tell us about JLL?s power-brands strategy.
We have chosen seven brands as power brands. After the acquisition of Henkel, we have 10 brands in our stable. We will invest in our power brands in the next two quarters. We have set aside R160 crore to build these brands this fiscal. Our power brands include Ujala fabric whitener, Maxo household insecticide, Margo, Fa deodorant, Exo and Pril dish wash, and Henko washing powder.
What were JLL?s major growth drivers in the April-June quarter? Would you be able to sustain this growth?
Our net sales rose to R318.18 crore during the first quarter from R281.21 crore during the same period a year ago. Following the Henkel acquisition, JLL has a strong presence in urban and rural sectors. You can call it the synergy effect. Our bottomline improved because of our trade margin rationalisations.With Henkel?s strong presence in urban India and our strength in semi-urban and rural sectors, we will be able to sustain this growth for the next two years.
Do you plan to invest in R&D this fiscal? What?s going to be your distribution strategy?
We are in the process of setting up a modern research and development lab in Mumbai. Following the acquisiton of Henkel, we have an R&D centre in Pondicherry. We plan to go for extension of existing brands. We may launch Margo face wash and other variants in the next few months. As per its consolidated distribution strategy, JLL now employs 1,450 distributors, 200 super-stockists and 1,500 sub stockists to sell its 10 brands across the country.
Tell us about your foray into the services sector.
We did that through our subsidiary Jyothy Fabricare Services. At present, we have 102 retail outlets across the country, We are the largest in this sector now.
