Godrej & Boyce, the appliances maker, is looking to break even by the end of the current financial year, at a Rs 1,200-crore turnover. In an interview with Pradipta Mukherjee, Godrej & Boyce’s chairman and managing director, J N GODREJ, said the company is looking at mergers and acquisitions, and consolidation of some businesses while diversifying, to boost sales. Edited excerpts:
What is the way forward for Godrej & Boyce?
We are looking at 15-20 per cent growth, year-on-year. We are open to mergers and acquisitions, consolidation of some of our existing businesses or even diversification.
What new product introductions are in the pipeline?
We are experimenting with televisions in Andhra Pradesh. We will have to extend the experiment to a few more states before we can take a call on whether a television business makes sense for us. We are also looking at launching new products under our existing range. Already, we have the highest market share in direct-cool refrigerators at 23 per cent.
Has your appliances business broken even yet?
It should break even by the end of the current financial year or it should at least be close to it. The division breaks even if it registers a turnover of Rs 1,200 crore. Last year, the division registered a turnover of Rs 1,000 crore.
Has the recession had any impact on your sales?
Although consumer products have done very well, despite the recession, a lot of clients have been cautious about placing orders. This does not impact us right now, but if the order flow slows down, we may face margin pressure in the next two-three years.
Will you raise prices?
There may be a very negligible increase in prices of consumer goods due to the mandatory energy labelling policy which would come into effect from January. But, it should not make a huge difference in consumer purchase sentiments, as consumers are also looking at buying the highest energy-saving products, like buying four-star and five-star rated products. Otherwise, we have not increased or decreased prices of our products in the recent past, nor are we looking at any correction in the next two months, due to corrections in commodity prices.
What about your retailing business?
We have rebranded our retailing business as ‘Interio’, and have dropped our earlier brand name, ‘Lifespace’, because we wanted to consolidate our furniture business. Going forward, we will sell only office and home furniture from our direct sales channels, Godrej Interio, while the other Godrej products would be available through multi-brand outlets or through the franchisee route. Our furniture business currently contributes close to 20 per cent to our overall turnover.
What plans for mergers and acquisitions?
We are looking at acquiring companies in the consumer products space. Sara Lee is going through a process of divestment, which is a complex process. We want to have complete control of Sara Lee’s home care business in Asia, for which we have appointed merchant bankers. But other companies are bidding, too, so it is a situation of wait and watch for us now. This will help the company expand globally. Godrej Consumer Products has a joint venture, Godrej Sara Lee, with Sara Lee in India.