Marico eyes more buys in Egypt

After acquiring the Egyptian hair care brand Fiancee last month, Mumbai-based Marico Industries is hungry for more. The company was scanning the Egyptian market for more acquisitions, Marico CFO Milind Sarwate told Business Standard.

This time Marico is looking closely at the beauty and wellness segments. Marico may also examine rationalising the Fiancee portfolio.

A source close to the development said Marico was already in talks for other international acquisitions. But like all Marico acquisitions, the company will pick up brands and not entire companies.

Sarwate said the company would continue with its strategy of acquiring brands as companies often came with a lot of unwanted baggage like litigation or unwanted assets.

To get a closer grip on its Egyptian operations, Marico recently appointed Brajesh Bajpai, a former executive of Frito Lay India, as its country head for the African nation. Marico might also make Egypt the hub for its expansion into other African markets.

The company is also looking at other African countries like South Africa for identifying potential acquisition targets, apart from South-East Asian countries like Vietnam, Indonesia and Malaysia.

Sarwate said, "Any country where it will be difficult for Marico to export its products because of import duties will be a potential acquisition market."

Marico may also consider manufacturing its Indian brands in Egypt in order to reach other markets in Africa.

At present, the company's immediate task is to integrate Fiancee with Marico. This will be followed by a rationalisation of the Fiancee portfolio. "Apart from hair gels and creams, the brand also has a presence in skin care and shampoos," said Sarwate.

With Marico's stated focus being pre and post-shampoo markets, and not shampoos, it is likely that the Fiancee shampoos might be the first casualty in the rationalisation process.

Fiancee is expected to do sales of Rs 50-55 crore in the next 12 months and its performance will show on Marico's balance sheet from the third quarter of this financial year.

Marico executives claim Fiancee has a market share of more than 20 per cent in certain parts of Egypt, where the hair care market is valued at Rs 175 crore.

Closer home too, Sarwate said they would continue to evaluate their strategy on brands which were on maintenance mode like the food brands, Sweekar and SIL.

However, in India, Marico will continue adding to its portfolio, though not through acquisitions in the near future. The national roll-out of products like leave-on conditioners and Parachute Therapie will happen over the next few months.