Mumbai-headquartered Godrej Consumer Products (GCPL) is keen on one or two more acquisitions in the next 12-24 months.
“We are certainly open to acquisitions that provide a strong strategic and operational fit across Latin America, Africa and parts of Asia. That continues to be an important objective for us,” Vivek Gambhir, chief strategy officer, Godrej Industries told Business Standard.
In the last one year, GCPL had wrapped up four international buys, including Nigerian company Tura in March 2010, Indonesian major Megasari Makmur in April 2010, and Latin American companies Issue and Argencos in May and June, respectively.
The company had spent close to Rs 1,600 crore acquiring these firms, much of which was raised through debt.
International operations in financial year 2010-11 will contribute 30-31 per cent to GCPL's overall revenues. This would be a significant jump over the previous year, when international revenues contributed 18 per cent to total revenues, Gambhir said.
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GCPL, the maker of brands like Cinthol, Good Knight and Hit, is comfortable with a threshold of about 40 per cent as far as international revenues are concerned, Gambhir said. “Domestic operations would be an important constituent of the business, contributing about 60-70 per cent. But we are open to the idea of international revenues being 40 per cent of the total turnover,” he said.
Currently, the largest contributor to international revenues is Indonesia, followed by Africa and Latin America, at about seven per cent each. UK, where GCPL made its first acquisition — Keyline Brands in 2005 — contributes only five per cent to the international kitty.
Gambhir said the skew in terms of regional contribution is likely to remain the same for the next few years, though GCPL is counting on the African continent to take off in the near future. GCPL first entered the African market in 2006 with the acquisition of Rapidol, a company manufacturing hair colourants. The acquisition of Kinky, which is into hair extensions, came next in 2008. Both South African companies have since, been merged to derive greater synergies. “The big wild card is going to be Africa. We will see how it goes,” Gambhir added.