Emami sets up arm in UAE

The city-based consumer products company Emami, has floated a wholly owned subsidiary in United Arab Emirates (UAE), for penetrating Gulf, north Africa and Levant markets.

The subsidiary called Emami International FZE would primarily outsource products from contract manufacturing units in UAE for its GAL (Gulf, north Africa and Levant) operations.

The company is also contemplating to set up a manufacturing base in Egypt in the next 2-3 years to cater to the highly growing north African market. It is developing four power brands for overseas market in order to become transnational in the next five years.

Currently, around 15 per cent of Emami's turnover of around Rs 350 crore comes from international operations.

Prashant Goenka, director who is in charge of international operations, told Business Standard that the company was now formulating a business strategy for the lucrative GAL market.

"The floating of a subsidiary in the UAE is a part of the strategy. Later on, we may float a wholly owned subsidiary in Egypt along with our own manufacturing base," he said.

According to him, Emami is experiencing 70 per cent growth in the GAL market as a whole. Emami FZE would initially look into countries such as the UAE, Saudi Arabia, Quatar (Gulf), Syria, Lebanon, Jordon (Levant), Egypt and Morocco (north Africa).

Later, a subsidiary in Egypt could take up the north African market. Goenka indicated that Emami would prefer to continue with contract manufacturing facility in the UAE for Gulf and Levant but in north Africa it would have its own facility.

"The labour cost in UAE is too high. So it makes sense for us to have our own manufacturing facility in Egypt, the biggest north African market. The cost level in Egypt is like India but the process of setting up a unit there is bit longer than in the UAE," he said.

Emami director also informed that the company was almost ready to set up a manufacturing unit in Bangladesh too. Incidentally, Emami currently has a subsidiary in Bangladesh and the UK.

The UAE subsidiary would be third from the group. "We are waiting for the final approval from the Bangladesh government to start our manufacturing operations there," he added.