Reckitt Benckiser betting on EMs, gung-ho on India

With developed markets slowing down, British consumer giant Reckitt Benckiser is doing what many others are—concentrating on emerging markets instead.

In an exclusive chat with CNBC-TV18's Senthil Chengalvarayan, the company's India-born global CEO Rakesh Kapoor explained why these 'power markets' deserve the company's attention and how India is poised to become an important cog in its growth wheel. With global markets still not being able to turn the corner, consumer goods giant Reckitt Benckiser, the maker of 19 household brands including Dettol and Air Wick, has shifted its focus to 16 'power markets' — countries that would serve as its future growth drivers. A large part of this power list is comprised of emerging markets such as the BRICs, African and Middle Eastern nations. To this effect, the company is redeploying its management and investment resources to favour its six billion consumers in emerging markets, on whom, only 36% of the company's management had been committed so far as against 64% of the management that focussed on only 0.9 billion consumers in developed nations. Kapoor says, "Power markets are something we need to define very clearly for this company simply because we do know that world economy is not on one single track. There are three tracks—the fast track of India and China, the medium track of Germany and there are some slow track economies." Kapoor is especially buoyant about India. Why not? It is Rs 2,500 crore Indian arm has been clocking 20 percent growth over the past two years. While India too has been rocked by global economic headwinds, Kapoor believes the future will reap rich dividends. Kapoor further says, "I think if you take short-terms views about anything, you are going to have a problem. I am one who takes along range view on the key markets and India is a great story for everyone." And despite the string of successful acquisitions the company has made, including the Rs 3,270 crore acquisition of Paras Pharmaceuticals in 2011, Kapoor maintains that organic-led growth, which ensured Reckitt Benckiser a 7 percent growth rate over the past decade, will always remain its topmost priority.