Emami has surpised the market by launching its recent acquisition bid. Which is a better growth option, acquisitions or new brand development?
R S Agarwal: We realised some years ago that the competitive environment was evolving so fast that we had to combine in-house brand development and acquisitions to grow the business. R S Goenka: Our acquisition strategy covers companies in India and aboard. The targets should match Emami's size and product structure.
What about your brands?
RSA: Emami, meanwhile, will be expanding its existing brands on all parameters and also promoting new brands with up to four brands to be launched each year going ahead. The brands will be organised into product lines for hair care, skin care, colour cosmetics, wellness and oral products, and household and food products. RSG: The detailed strategic plan, including the calendar for launch of brands, is being worked out in-house with advice from specialists in the field.
What about acquisitions, including your current efforts...
RSA: All we can divulge at this stage is that we are close to an acquisition in the UK but there are interesting oppportunties in Egypt. Another exciting and major opportunity is being explored in mainland Europe that offers a complete range of FMCG products and brand lines running close to Rs 2,000 crore. RSG: Talks are being held with agencies, such as Evol of UK and Tony Pearce of Australia, on these lines, and consultant Chanda Zaverie in the US. The US market looks a little more difficult . RSA: I know the current bid is attracting media attention but we are serious and focussed. He (R S Goenka) and I have been together since our school days and we monitor the situation jointly on a daily basis. But we believe the company (Zandu) will do much better and create more value and wealth under our management.
How does Emami plan to move up the value chain?
RSG: Emami intends to move up the value chain through development or acquisition of international global brands and setting up of manufacturing units overseas and strong R&D initiatives, along with back-room work. RSA: The biggest challenge is not resources but the creation of a team of ideators and leaders with the access to the information and knowledge to bring the best of innovative thinking to every sphere of activity of the company. The challenge is to match the best of global practices in the area of innovation. RSG: I am happy to say that we are now building our second and centralised R&D facility that would possibly be the biggest company-owned lab in Kolkata.
Emami appears to have few premium products in its portfolio. What is being done to change this? Is there scope for bringing in foreign brands under the Emami banner?
RSA: In the domestic market, Emami brands would be fitted into a four-layer pyramid structure with the top layer being made up by ultra premium brands, the second tier representing the premium products, the third comprising what we call the
