Godrej eyes buys in Brazil, Indonesia

After acquisitions in Europe and Africa in the last 12 months, the Godrej group is now looking at possible acquisitions in Brazil and Indonesia.

The acquisitions were expected to be in the areas of personal care and household care, said Adi Godrej, chairman, Godrej group, while speaking to the media on the sidelines of the CII Corporate Governance Summit in Mumbai.

The group is also on the verge of acquiring a household insecticide company in China through its joint venture Godrej Sara Lee, and is evaluating investment options in other developing markets in Africa and Asia.

On funding the proposed acquisitions, Godrej said the group had a comfortable debt position. "There are enough options to raise money either through FCCBs or QIPs," he added.

In the last 12 months, Godrej made three acquisitions. Last month, Godrej Consumer, the group's consumer products company, completed the acquisition of Rapidol, the hair colour company it acquired in South Africa.

In October 2005, GCPL had acquired Keyline Brands, a UK company that gave the group access to a boutique of personal care brands like Cuticura.

Also, Godrej Beverage & Foods took over Nutrine, a confectionery brand, for Rs 250 crore.

Godrej said his group would focus on developing markets for identifying acquisition targets. Godrej personal care brands posted 20 per cent growth in 2005-06.

On the back of acquisitions, analysts peg sales growth in 2006-07 and 2007-08 at 40 per cent and 25 per cent, respectively.

With control over raw material costs through in-house production of fatty acids (highest in India), Godrej is expected to get better margins as prices of fast-moving consumer goods go up.

Godrej also said he expected FMCG companies to announce further price hikes in the following months.