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Constantly looking to acquire biz in India: CEO Reckitt Benckiser

Interview with Rakesh Kapoor

Photo: linkedin.com

Photo: linkedin.com

Arnab Dutta New Delhi
Rakesh Kapoor, chief executive officer of the British consumer goods giant Reckitt Benckiser is bullish on India. In a candid conversation with Arnab Dutta, he says India is such a fantastic market that a company has to look at both organic and inorganic growth opportunities. Edited excerpts:

How has RB fared in India in the recent past?

We have increased our investment in India at double-digit growth rate for the past few years, in all avenues — distribution, capacity expansion, logistics, go-to-market, talent and brand building and new segments like e-commerce. Our investments are multi-dimensional and that is why we have had double-digit growth.
 
Are you looking to acquire brands/businesses here?

We have a strong manufacturing base here with plants at Mysore (Karnataka) Hosur (Tamil Nadu) and Baddi (Himachal Pradesh), where we are regularly adding capacity. India is such a fantastic market that you ought to look at both organic and inorganic growth opportunities. We are constantly looking for an opportunity to acquire, but that has to be in line with our strategic requirements… and depends on how much value we can add to it. We don’t want to be just another new owner.

Do you have any takeaways from the talks between the delegation from India and the UK?

Health and hygiene is one of the key topics for co-operation between India and the UK — that has been identified by the two prime ministers. Public spending in India is one-tenth of that of China ($200 per capita), which shows that current level of spending is inadequate. But it’s going to increase multi-fold in the next 10 years. We had discussions on how access to consumer healthcare products can be increased in India and how to deregulate the category in terms of pricing. In the UK various drugs are available on the shelves and their prices are determined by market forces.

RB has been associated with Swachh Bharat Mission since the beginning. What are your next plans?

RB is one of the biggest partners in the Swachh Bharat Mission, where we are working on changing the behaviours. Having access to toilet is not enough, we need to ensure people use them. We have also recommended the government to make hand hygiene mandatory. I am personally learning from Swachh Bharat Mission and our role in it. I am also thinking about how we can actually create a similar movement, including multiple stakeholders.

Is RB ready to cash in on the growth of consumer healthcare segment in India?

Consumer healthcare is a relatively small category in India, currently pegged at $3-4 billion per year. My estimate is that it could multiply very fast and become a $10-billion business by the end of this decade. We have a good portfolio in this segment but the question is how well we can leverage that. We will have to provide meaningful innovation and back it with medical marketing to create awareness about our brands. Consumer healthcare works best when consumers have access to it. Access should not be restricted and these products should be made freely available. We need support of the authorities for a better pricing environment where prices should not be restricted to the level where companies do not have any incentive to innovate.

In a market like India, where affordability remains an issue, how do you manage growth and margin?

Our target is to constantly expand the gross profit margin, either by cutting down input costs or by improving sales revenue by introducing innovative products that can be sold at a premium.

Higher margins, in turn, let us invest more in innovation. So, for example, we came up with a new product — Dettol Squeezy — which comes at lower price.

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First Published: Nov 08 2016 | 11:48 PM IST

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