Dear Partners in Growth,
It gives me immense pleasure to share with you, another year of
impressive performance by Dabur.
The year has been a landmark year in more ways than one. During the
year, Dabur surpassed the Rs. 5,000 crore or the US$ 1 billion mark in
revenues and is now one of the few companies in India which have
achieved this distinction. Our Foods division achieved a new milestone
surpassing the Rs. 500 crore revenue mark. Odonil, one of our Home
Care brands has now become a Billion Rupee brand, taking our count of
Billion Rupee brands to twelve.
These are trying times, with the industry and the world witnessing fair
bit of challenges, given the deepening debt crisis in Europe, political
upheavals in parts of Middle East and rising tensions between Iran and
the West. India too witnessed its share of challenges during the
2011-12 fiscal, led by a deceleration in Industrial production and GDP
growth rates. Steep inflation and the resultant high input costs
coupled with adverse currency movements and disruptive competition were
some of the other challenges in the Indian market.
The external headwinds notwithstanding, the consumer goods industry has
performed well. I am pleased to inform you that Dabur has ended the
year with strong growth in both revenues and profits. On a consolidated
basis, the revenues grew by 29.6% to end the year at Rs. 5,283.2
crores, and the Net Profit rose 13.4% to Rs. 644.9 crores. The steady
growth achieved by Dabur has been enabled by sustained investments in
marketing and brand building, distribution, production, supply chain
management, and by driving operational efficiencies across functions.
Our new launches such as Dabur Almond Hair Oil, mixed fruit flavoured
variant of our flagship health supplement brand Dabur Chyawanprash,
premium face masks and scrub under Dabur Uveda and a range of
professional facial products and body bleach under the brand Fem during
the year have been well accepted in the market. The pace of innovation
in the International Business has been fairly robust as evidenced by
launch of products such as skin serums, skin creams, skin lotions, wet
wipes, new variants in hair oils, shampoos etc. In addition, we
leveraged Hobi Group''s expertise in hair gels and launched the Vatika
Hair Gel range in our international markets. Going ahead too, Dabur
will accelerate its innovation initiatives and introduce a host of new
products and variants to consolidate our competitive positioning while
remaining focused on current market segments in which we operate today.
The growth strategies and your Company''s achievements through 2010-11
have been elaborated in detail in the Management Discussion & Analysis
section of this report.
During the year, we undertook two major distribution related
initiatives in our domestic business. The rationale behind our first
initiative was to enhance the quality of our distribution by leveraging
scale of a unified business, since the earlier distribution structure
for the Consumer Health Division comprising OTC and Ethicals was
subscale. We integrated the entire portfolio of Dabur and created
specialized networks to meet different service needs of categories and
channels. The sales structure has now been aligned along three
distinct categories - Home & Personal Care, Health Care and Foods. The
second distribution initiative, which is still work in progress, is
focussed on significantly increasing the reach of our brands in rural
India since rural markets offer significant potential, driven by
increasing disposable incomes and rising aspirational levels. We
conducted a pilot in UP and Maharashtra which yielded positive results.
Consequently, we are rolling out the initiative in other states like
Punjab, Rajasthan, Bihar, West Bengal, Assam, Orissa, Madhya Pradesh
and Karnataka. These ten states together represent around 70% of the
rural FMCG potential.
The year gone by witnessed some significant developments, in our
International Business which I would like to highlight in this letter.
Your Company is in the process of establishing a Greenfield
manufacturing unit in Sri Lanka, which would become operational by the
second half of the current fiscal. This unit will initially produce our
packaged fruit juices under the brand Real and would later be expanded
to cover more products. In addition, we are contemplating local
manufacturing in Africa for Namaste''s range of hair care products which
in turn would help us enhance our product offering and presence in
Our business is committed not just towards profitable growth, but also
towards leaving a deeper imprint on the society as a whole. We, at
Dabur, believe that financial performance and sustainability go hand in
hand and can never be separated. Dabur continues to place a strong
emphasis on societal needs, while addressing environmental and climate
change issues with increased significance. Small yet significant steps
are being taken to not only reduce our carbon footprint but also
continuously monitoring waste generation and establish effluent waste
treatment plants across all our manufacturing units. As we expand our
global footprint, we are also matching our business growth while
addressing environmental and societal needs wherever we operate.
I would like to take this opportunity to thank all our consumers,
business partners, shareholders and employees for continued commitment
and support. I gratefully acknowledge the confidence and faith reposed
by the shareholders in the Board and the Management team which has, in
my view, spurred the Company to take on more challenges. Finally, I
must applaud the tireless efforts, dedication and commitment of our
employees who have helped us reach where we are now and look forward to
their continued support in the journey forward.
Dr. Anand C. Burman
Dabur India Ltd.