Financial Daily from THE HINDU group of publications
Friday, Mar 04, 2005
Emami plans to focus on fast-moving health goods
New Delhi , March 3
EMAMI Ltd has decided to focus on the Fast Moving Health Goods (FMHG) market to generate growth. Estimated to be a Rs 15,000-crore market, FMHG comprises health products such as OTC medicines, digestives, pain relief balms and supplements such as chyawanprash.
Other FMCG players already making a beeline for this sector include Dabur India Ltd, Baidyanath, Hamdard, Wipro Lighting and Consumer Care and Zandu Pharmaceuticals.
Mr Mohan Goenka, Director, told Business Line that the company does not want to be in products that generate sales volumes but do not help Emami's bottomline. "We have decided to focus on the FMHG market rather than some of the FMCG products such as soap, shampoo and beauty cream; these products generate volumes but do not provide adequate margins. Over the next three months we will get into areas such as cough and cold medicines, digestives, laxatives and memory boosters. We recently launched a baby massage oil."
Emami has also decided to put the `Beauty Secrets by Madhuri' range of products (shampoo, cream and soap, among others) on the back burner, he said. And in line with the focus away from several traditional FMCG products, the company has also completed a comprehensive restructuring of its brand portfolio so that it now has only six "power" brands. These include Boroplus antiseptic cream and prickly heat powder, Navratna hair oil, Sona Chandi Chyawanprash, Mentho Plus Pain Balm and Himani Fast Relief.
Having completed reworking the branding initiatives, Emami has now begun to assess distribution alternatives. It has tied up with the Post & Telegraph Department of the Maharashtra Government, so that all post offices in the State stock Emami products. The company has also entered into a similar arrangement with ITC's e-choupal project so that it gets access to 450 virtual distribution points in Uttar Pradesh and Madhya Pradesh.
South India is also to be a target market for the company. Mr Goenka said Emami has realised the untapped potential of the region and hopes to realise 35 per cent of its total turnover from the four Southern States within the next two years. It has signed regional film star Upendra for brand endorsements in Karnataka and is looking out for well-known names in the Tamil and Andhra film industry.
AFTER consolidating its domestic sales strategy, Emami Ltd has now set its sights on the overseas markets.
The company already has a subsidiary in the UK and plans to set up one in Bangladesh.
Mr Mohan Goenka, Director, said although Bangladesh is a small market and needs an initial investment of less than Rs 5 crore, Emami plans to take a large number of its products there.
He said the company was open to forging joint ventures to enter other overseas markets.
Meanwhile, it plans to launch an exclusive, top-end brand called "Ayu Care" in the UK market.
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