Marico reorganising business, aims to double turnover in four years

Rejig meant to drive synergies across markets and push organic growth

Six months after being elevated to the managing director at the Rs 4,676-crore Marico, Saugata Gupta is undertaking a reorganisation of the business to double the turnover in four years. The reorganisation, One Marico, is meant to drive synergies across markets and ensure the maker of Parachute and Saffola, with operations in Asia, Africa and West Asia, grows at an annual rate of 15-20 per cent.

"Our energies will be devoted to driving organic growth in our core markets, while inorganic growth will act as a top-up. Last year, we integrated the India and international businesses in our drive to consolidate operations. To achieve the next level, we are now synergising how we do business in terms of cross-pollination of brands and offerings, talent mobility, and transfer of best practices, processes and systems so we are more standardised in those respects across markets," Gupta, 47, told Business Standard.

ONE MARICO

• After integrating its domestic and global businesses last year, Marico is driving synergies between the two to grow organically
• Three areas have been identified for growth: Skin and hair nourishment and male grooming
• At an India level, the company is pushing for direct distribution and targeting chemists, cosmetic, food and kirana stores

The reorganisation will see Marico focus on three key areas, including skin and hair nourishment and male grooming. "We also have a coconut oil and foods business in India and Bangladesh and a foods business in Vietnam. Those will continue. But at a global level, it is skin and hair nourishment and male grooming that we will drive," said Gupta, who studied at the Indian Institute of Technology and the Indian Institute of Management and has been with Marico for a decade.

The company will also create regional hubs to grow its business and is expected to drive synergies of scale across its manufacturing units. Besides India, Marico has plants in Egypt, Vietnam, Bangladesh and South Africa. The last four locations will act as regional hubs for North Africa, Indo-China, Southeast Asia and sub-Saharan Africa, while Dubai will act as a hub for West Asia.

The company gets 75 per cent of its revenues from India.

The company is driving direct distribution aggressively in India as it aspires to push a broader range of its products into outlets. Marico directly reaches 900,000 outlets in India, which, Gupta said, would be increased over time.

"We directly and indirectly  reach 3.6 million outlets in the country. Two years ago, we were at 3.4 million outlets. While the jump may not be much, our emphasis is on improving our direct reach. The more you can reach stores directly, the wider is the assortment of products you can push depending on how the store is positioned," Gupta said.

Apart from kirana stores, the company is aggressively targeting chemists, cosmetics outlets and food stores to push its range in India. This emphasis is tied to Marico's larger aim of accelerating the pace of growth of value-added products led by brands Livon, Setwet and Zatak acquired from Reckitt Benckiser two years ago in a Rs 500-crore deal.