Godrej Consumer eyes more buys

For companies such as the Rs 708 crore Godrej Consumer Products (GCPL), acquisitions would be the path to growth in 2006-2007.

In the calendar year 2006, GCPL acquired South Africa's Rapidol at an approximate cost of Rs 50 crore.

"We expect Rapidol to add 5 per cent to GCPL's bottomline this year after taking the interest costs on the acquisition amount into account," informed GCPL Chairman and Managing Director Adi Godrej.

GCPL is expected to exceed Rs 1,000 crore in consolidated turnover for the year ended March 2007.

In 2005, Rapidol UK as well as its subsidiary Rapidol International had a combined turnover of 52 million South African rand (nearly Rs 34 crore).

This acquisition gives GCPL entry into the large and fast-growing African hair colour market, ownership of strong brands and the opportunity to introduce GCPL's value-for-money product portfolio in those geographies.

Elaborating the strategic fit of GCPL and Rapidol, Godrej said, "The connection between GCPL and Rapidol would mainly be in technology and marketing.

GCPL would mainly use the Godrej brand, whereas Rapidol would use the Inecto brand. The only risk involved in such acquisitions is country risk, that is, the stability of South Africa and other African countries."

The Rapidol acquisition gives GCPL ownership of strong ethnic hair colour brands such as Inecto and Soflene in ten countries.

Rapidol's distribution network is spread across South Africa and other African nations such as Zambia, Mozambique, Tanzania, the Democratic Republic of Congo, Swaziland, Ghana, Namibia, Zimbabwe, Mauritius, Seychelles and Madagascar.