Marico looking to acquire new FMCG companies

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Marico looking to acquire new FMCG companies

Marico is looking at buying out local consumer product companies & brands in the African Sub-Continent, South East Asia & Middle East. Bad monsoon can also impact sentiment in terms of product launches.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Marico See previous management interviews See what other Experts & Brokerages are saying about Marico

Marico is looking at buying out local consumer product companies & brands in the African Sub-Continent, South East Asia & Middle East. Bad monsoon can also impact sentiment in terms of product launches.

Milind Sarwate, CFO of Marico Industries says that the company has tried to accelerate growth significantly in the past couple of years. The company wants to consolidate on existing clinics before expanding. Acquisitions will boost performance going forward, he adds.

Excerpts from CNBC-TV18's exclusive interview with Milind Sarwate:

Q: We have not seen too much of a price increase coming in from the FMCG sector since the last quarter. What is the kind of growth rate we can expect from the FMCG space and Marico in particular?

A: I think by and large the FMCG sector has done better than last year. In particular, Marico would do better than last year because we have had a few acquisitions in the past few months and the inorganic growth straightaway would add towards the topline and bottomline. In general, the consumer sentiment is up and that is the good news for the overall sector.

Q:  Do you see any kind of facility for FMCG companies to go ahead and increase prices in the current market? We have seen some amount of dampening effect in sentiment. So going forward what do you expect?

A: I think that there is some dampening of sentiment because of the delayed monsoon but it depends upon what category of products you are in. If you are in daily necessity products like coconut oil, the impact is not significant. Overall, there is a bad impact of delayed monsoon. That may impact the sentiment in terms of upgrading or some high end product.

I think that the media is hyping it a little bit. I do not think that the consumers do a day-to-day decision-making based on the monsoon forecast.

Q: What kind of acquisitions you are looking at in Egypt as well as in South Africa. Is it more in terms of buying brands or buying companies and if so when can we get a final word on it?

A: Essentially, if you look at our growth trajectory, we have tried to accelerate growth significantly in the past couple of years. We have a certain turnover target to reach and for that organic growth is very strong, but we need inorganic growth also. We are looking for opportunities in India as well as overseas.

Basically, we are a beauty and wellness company and we would like to stick to these when we acquire.  So we will stick to hair-care, skin-care and health-care. In terms of geographies, we have been strong in Bangladesh and the GCC countries but we would like to expand to contiguous areas like South East or Middle East or the African Sub-Continents.

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