FMCG major Godrej Consumer Products Ltd is eyeing acquisitions worth $1 billion in emerging markets in this fiscal, a top official of the company said.
"We are looking at acquisitions worth up to $1 billion. The ideal range (acquisition price) would be around $50-100 million. We are open to acquisitions that are synergistic and accretive to our growth," Godrej Group Chairman, Adi Godrej, said.
The acquisitions would be funded largely through internal accruals, Godrej said.
The soap and hair colour-maker has been monitoring international market conditions closely and is understood to be scouting for opportunities in China, Brazil, Indonesia, Philippines, Thailand, Egypt, South Africa and Mexico.
With an export portfolio covering 30 countries, GCPL’s product line consists of soaps, detergents, hair colour, fabric cleaner, shaving cream and deodorants, among others.
In 2005, Godrej bought UK-based personal-care products firm–Keyline Brands–followed by two South African hair product firms–Rapidol and Kinky–in 2006 and 2008, respectively.
"Twenty-five per cent of GCPL’s revenues come from outside India," Godrej said.
He expected the consumer durables segment to fare well and said that it would be a key growth driver for the group in FY 10.
"The rural FMCG market is growing handsomely. It is, in fact, growing faster than the urban market due to various measures taken by the Government. We’ll be setting up more retail outlets to enhance our distribution reach to capitalise on this," Godrej said.
The BSE-listed firm posted a consolidated net profit of Rs 172.6 crore in FY’09, up by eight per cent over the year-ago period.
"Our soap business has generally done well. We got value for money because commodity prices came down. Besides, there was easing in other factors like freight, fuel, excise duty," Godrej said.
GCPL continues to be the second-largest toilet soaps player with a market share of 9.9 per cent in Q4 FY’09.
"There was some pressure on our margins in the first three quarters of this fiscal, but GCPL bounced back to strong levels in the last quarter," he said.
Although no new brands will be launched this fiscal, Godrej said the company planned to introduce at least five new product variants.
Godrej said the group’s chemicals business, looked after by Godrej Industries Ltd, did not do well in 2008-09 because of high commodity and vegetable oil prices.
