Audacious Brajesh ? - Business Today, India - May 2008

From Business Today

Walking the talk

T.V. Mahalingam

May 1, 2008

Regular walkers at the windswept Bandra promenade in Mumbai are likely to spot a professorial-looking man walking briskly past entwined couples and sleepy constables, barely throwing them a glance. Only an avid follower of business magazines or the burgeoning business news channels would recognise 57-year old Harsh Mariwala, Chairman, Marico, one of India’s fastest growing marketers of fast moving consumer goods (FMCGs).

Harsh Mariwala

Mariwala follows a rigorous physical regimen that sees him hit the treadmill, take long walks on the sea face, and play golf whenever he can find the time. It’s, therefore, no surprise that Mariwala is tough to keep up with when he is walking.But then, so is it with the company that he heads. As the financial results for 2007-08, which were declared last fortnight, reveal, Marico has clocked group revenues of Rs 1,907 crore—up 22 per cent over the previous financial year.

Since 2003-04, revenues have grown at a compounded annual rate of 21 per cent, something few FMCG marketers can match. Net profits are up 30 per cent for the same period. To cap an impressive run, look at it this way: The group has experienced 30 consecutive quarters of revenue growth and 34 quarters of profit growth.

But even that’s not enough for Mariwala. “We want to be the fastest-growing FMCG company. And we want to do that consistently. There is no point in growing one year at 30-40 per cent and the next year at zero,” says Mariwala.

To get that consistent high growth, Marico has a hand of four good cards. The first is a portfolio of established businesses and brands (businesses like hair oils and edible oils, and brands like Parachute and Saffola); the second card is the hunger to create new business models, the Kaya Skin Clinics being just one example of this; third, the international operations have grown from strength to strength. . . . .

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. . . Spreading wings

Another significant aspect of the Marico story has been its rapidly growing international business and its string of international acquisitions. Marico Chief for HR & Strategy Milind Sarwate narrates an interesting story about the company’s way of doing business. Even as Marico was negotiating its first acquisition in Egypt for the haircare brand Fiancée from the Egypt based Ready group, the company appointed a country head.

“We had the audacity to appoint the country head for Egypt even as the negotiations were going on. The guy (Brajesh Bajpai from Frito Lay) had the audacity to join as Country Head with nothing on the ground, when acquisition papers were yet to be signed,” recalls Sarwate, who has worked on most of the company’s acquisitions.

It’s perhaps this hit-the ground-running attitude of the company that has seen its international business grow rapidly over the past couple of years. Last year, international operations accounted for nearly 16 per cent of the group turnover, clocking over Rs 300 crore. International revenues grew by an astounding 59 per cent. In 2006-07, revenues from international operations were at Rs 117 crore, or about 10 per cent of the group’s revenues.

With twin acquisitions in Egypt and a recent acquisition in South Africa, Marico is well set to tap the booming markets for beauty care products in Africa and West Asia. Marico has also been very astute in picking its acquisition targets. . . .

. . . The company’s Egyptian brands Fiancée and HairCode added nearly Rs 88 crore to the turnover. So, what does the future hold for Marico? “We don’t want one growth engine. We want all the product categories to grow. All products have to deliver at least double-digit growth,” says Mariwala. Keeping up with him will then get even tougher.

Read the entire article at Business Today