FMCG major Marico is eyeing a turnover of ₹10,000 crore by 2020. International operations account for 22-23 per cent of its turnover. The company expects its foods division — driven by Saffola as of now — to touch the ₹200-crore mark in another two to three years. According to Saugata Gupta, Managing Director and CEO, the company expects Bangladesh operations to improve from the second half of this year. A strategy shift —with focus on value-added oils and enhancing the non-Parachute portfolio — has begun. The second largest market after India, revenues in Bangladesh went down by 6 per cent in Q1. In an interview to BusinessLine, Gupta talks about having ₹200-crore food business, e-com plans and the company’s strategy in Bangladesh. Excerpts:

How do you plan to achieve ₹10,000-crore turnover?

We have identified five areas of transformation – innovation, go-to-market, digital and IT, talent and culture, and value management. These are the five areas where we make ourselves future ready and focus on, say the next three years.

Since we also operate in emerging markets, our focus will be on volume growth and market share, rather than just short-term margins. We (Marico group) already have a 16 per cent top-line and 19 per cent bottom-line CAGR (for the last five years).

How is the food business doing?

In terms of play, we are more into the healthy in-between meals segment. We expect to have a ₹200-crore food business in the next two to three years. We have already crossed ₹100 crore, last year. As of now, the entire food portfolio is through Saffola. Whether we will add new brands, depends on the opportunity.

What are your e-com plans?

There are certain brands which have a potential in e-commerce. And, we have upped that. Male grooming, beauty and health foods have a big potential in e-com and that has been proven in places like China. To give you an example, Livon Hair Gain sells 10 per cent through e-commerce. So we have to focus on one or two brands that get good growth in e-commerce, while having a mass play across all brands.

Bangladesh revenues have been a worry. Your comments.

In Bangladesh, it was single brand dependency, which is Parachute coconut oil. Two years ago, it (Parachute) was 90 per cent (of the portfolio). We have started making the portfolio far more broad-based. We have moved to 80 per cent. But we want to take it to 60 per cent. (Non-coconut oil portfolio is expected to contribute 40 per cent in the next 4-5 years.)

Growth of Parachute has already saturated. We had a 6 per cent decline in revenues, flat 2 per cent volume growth and negative value growth there (in Q1).

In the last one year, we have got Bangladesh structurally more aligned to India so that there is far better transfer and cross pollination of processes. What we are doing is a complete plug and play of the Indian portfolio. It will take some time, but we are confident of getting back significant growth in Bangladesh from the second half of this year.

So you are pushing your entire India portfolio in Bangladesh?

It will not be a complete Indian portfolio. Not everything (available here). But (it will be) a far more aggressive play in the value-added hair-oils, body lotions, and some of the categories we participate in India.

What are the other emerging markets you are targeting?

We are already in Sri Lanka and looking at a significant presence in Middle East, North Africa, South Africa, Vietnam and rest of South Asia like the SAARC nations.

Some of your competitors have acquired brands in South Asia to increase their foothold there. Will it be the same strategy for you?

As far as we are concerned, inorganic (expansion) is an accelerator and not the only way of growth.

Our focus will be on driving organic growth. We had in the last two to three years invested to ensure organic growth in the international businesses. So that acquisition does not become an escape button. However, we are open to acquisitions in select markets.

Male grooming has been another focus area for you here in India. What segments are you exploring?

Penetration of men’s grooming products in India is low, including styling ones. So this gives us an opportunity. In styling, we have to grow the category. Hair gel is one of the categories.

Any premiumisation plans for the men’s grooming portfolio?

In India, any category that has grown is mostly on availability and affordability.

There is enough opportunity at the bottom of the pyramid or in the mass segment rather than trying to grow at the top-end only.

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