Henkel plans to buy cosmetics, soap companies

Henkel Spic India Ltd, subsidiary of the $13,350 million (Rs 60,000 crore) Henkel KGaA, today said that it is open to acquiring soap and cosmetics manufacturing units in the western and northern regions.

"We have a strong presence in the east and south, but we need to strengthen our presence in the north and west," A Satishkumar, managing director, said at press conference to announce the financial results of Calcutta Chemcial Co Ltd (CCCL).

Henkel had picked up 90 per cent in CCCL in 1999. "We at present are not being able to cater to these two markets because of logistics problems, and planning to increase manufacturing capacity by modernising the plant in Calcutta," he said.

Satishkumar said the company will acquire units if it found a strong brand worth taking over. Henkel is expected to close the year with sales of Rs 370 crore against Rs 345 crore achieved in the previous year.

CCCL will contribute around 25 per cent to the turnover. Henkel is expected to report sales of Rs 83 crore and earn Rs 75 lakh as net profit.

Satishkumar, however, clarified, at present, the company is not actively pursuing acquisitions as modernisation of the plant is a priority.

The company is also considering reverse merger of its holding companies into Henkel India. "Things have not been finalised," he explained. He, however, did not rule out the possibility of a reverse merger at a later date. Henkel, however, has also ruled out the possibility of increasing its stake in CCCL.

"We have not been able to trace around 3 to 4 per cent of the shareholders of Calcutta Chemical. The rest of the stake is held by people who would not like to part with their holding, therefore increasing our stake beyond 90 per cent as of now is not technically possible," he explained.

Meanwhile, CCCL has firmed up plans of launching variants of its flagship soap brand, Margo, and its herbal tooth paste, Neem.