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FMCG are products that have a quick shelf turnover, at relatively low cost and
don't require a lot of thought, time and financial investment to purchase. The
margin of profit on every individual FMCG product is less. However the huge
number of goods sold is what makes the difference. Hence profit in FMCG goods
always translates to number of goods sold.
The term Consumer Packaged Goods (CPG) is used interchangeably with Fast
Moving Consumer Goods (FMCG).
Three of the largest and best known examples of Fast Moving Consumer Goods
companies are Nestlé, Unilever and Procter & Gamble. Examples of FMCGs are
soft drinks, tissue paper, and chocolate bars. Examples of FMCG brands are
Coca-Cola, Kleenex, Pepsi and Believe.
The FMCG sector represents consumer goods required for daily or frequent use.
The main segments of this sector are personal care (oral care, hair care, soaps,
cosmetics, toiletries), household care (fabric wash and household cleaners),
branded and packaged food, beverages (health beverages, soft drinks, staples,
cereals, dairy products, chocolates, bakery products) and tobacco.
The Indian FMCG sector is an important contributor to the country's GDP. It is the
fourth largest sector in the economy and is responsible for 5% of the total factory
employment in India. The industry also creates employment for 3 m people in
downstream activities, much of which is disbursed in small towns and rural India.
This industry has witnessed strong growth in the past decade. This has been due
to liberalization, urbanization, increase in the disposable incomes and altered
lifestyle. Furthermore, the boom has also been fuelled by the reduction in excise
duties, de-reservation from the small-scale sector and the concerted efforts of
personal care companies to attract the burgeoning affluent segment in the
middle-class through product and packaging innovations.
Unlike the perception that the FMCG sector is a producer of luxury items targeted
at the elite, in reality, the sector meets the every day needs of the masses. The
lower-middle income group accounts for over 60% of the sector's sales. Rural
markets account for 56% of the total domestic FMCG demand.
Many of the global FMCG majors have been present in the country for many
decades. But in the last ten years, many of the smaller rung Indian FMCG
companies have gained in scale. As a result, the unorganized and regional
players have witnessed erosion in market share.
Budget Impact
The education cess will add marginally to the tax burden of all FMCG
companies
The dividend distribution tax on debt funds is likely to adversely effect the
other income components of companies like Britannia, Nestle and HLL
The measure to abolish excise duty on dairy machinery is a positive for
companies like Nestle
Concessional rate for tea and coffee plantation machinery is a positive for Tata
Tea, HLL, Tata Coffee and other such companies
Duty reduction in food grade hexane will have a marginally positive impact on
companies like Marico and HLL
Area specific excise exemptions for North East, J&K, Himachal Pradesh will
continue to encourage FMCG companies to relocate to these areas.
India is rated as the fifth most attractive emerging retail market. It has
been ranked second in a Global Retail Development Index of 30 developing
countries drawn up by A T Kearney. A.T. Kearney has estimated India's total retail
market at $202.6 billion, is expected to grow at a compounded 30 per cent over
the next five years. The share of modern retail is likely to grow from its current 2
per cent to 15-20 percent over the next decade, analysts feel.
The Indian FMCG sector is the fourth largest sector in the economy with
a total market size in excess of US$ 13.1 billion. The FMCG market is set to
treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level
as well as per capita consumption in most product categories like jams,
toothpaste, skin care, hair wash etc in India is low indicating the untapped market
potential. Burgeoning Indian population, particularly the middle class and the
rural segments, presents an opportunity to makers of branded products to
convert consumers to branded products.
Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. With six factories and a
large number of co-packers, Nestlé India is a vibrant Company that provides
consumers in India with products of global standards and is committed to long-
term sustainable growth and shareholder satisfaction.
The Company insists on honesty, integrity and fairness in all aspects of its
business and expects the same in its relationships. This has earned it the trust
and respect of every strata of society that it comes in contact with and is
acknowledged amongst India's 'Most Respected Companies' and amongst the
'Top Wealth Creators of India'.
Nestlé’s relationship with India dates back to 1912, when it began trading as The
Nestlé Anglo-Swiss Condensed Milk Company (Export) Limited, importing and
selling finished products in the Indian market.
Brief History
After India’s independence in 1947, the economic policies of the Indian
Government emphazised the need for local production. Nestlé responded to
India’s aspirations by forming a company in India and set up its first factory in
1961 at Moga, Punjab, where the Government wanted Nestlé to develop the milk
economy. Progress in Moga required the introduction of Nestlé’s Agricultural
Services to educate, advise and help the farmer in a variety of aspects. From
increasing the milk yield of their cows through improved dairy farming methods,
to irrigation, scientific crop management practices and helping with the
procurement of bank loans. Nestlé set up milk collection centres that would not
only ensure prompt collection and pay fair prices, but also instil amongst the
community, a confidence in the dairy business. Progress involved the creation of
prosperity on an on-going and sustainable basis that has resulted in not just the
transformation of Moga into a prosperous and vibrant milk district today, but a
thriving hub of industrial activity, as well. For more on Nestlé Agricultural
Services,
Nestlé has been a partner in India's growth for over nine decades now and has
built a very special relationship of trust and commitment with the people of India.
The Company's activities in India have facilitated direct and indirect employment
and provides livelihood to about one million people including farmers, suppliers of
packaging materials, services and other goods.
The Company continuously focuses its efforts to better understand the changing
lifestyles of India and anticipate consumer needs in order to provide Taste,
Nutrition, Health and Wellness through its product offerings. The culture of
innovation and renovation within the Company and access to the Nestlé Group's
proprietary technology/Brands expertise and the extensive centralized Research
and Development facilities gives it a distinct advantage in these efforts. It helps
the Company to create value that can be sustained over the long term by offering
consumers a wide variety of high quality, safe food products at affordable prices.
Products
Financial Trends
Rupees in Millions
2001 2002 2003 2004 2005
Gross Sales 19,210.0 20,472.0 22,798.3 23,728.2 26,438.9
Domestic Sales # 16,110.9 18,109.8 20,226.9 21,292.8 23,847.1
Export Sales 3,099.1 2,362.2 2,571.4 2,435.4 2,591.8
EBITDA * 3,143.6 3,985.3 4,446.8 4,509.9 5,220.5
Other Income 162.3 284.0 278.3 144.5 237.4
Impairment loss on fixed
13.9 212.5 22.2 23.3 26.4
assets
Provision for contingencies 180.9 313.6 229.6 266.9 223.2
Profit before taxation and
2,577.7 3,188.4 3,991.5 3,864.9 4,690.6
exceptional item
Net Profit before exceptional
1,731.5 2,069.1 2,630.8 2,519.2 3,095.7
item
Exceptional item - net of tax - 53.9 - - -
Net Profit after exceptional
1,731.5 2,015.2 2,630.8 2,519.2 3,095.7
item
Earnings per Share (Rs.) 17.96 20.90 27.29 26.13 32.11
Dividends per Share (Rs.) 14.00 18.00 20.00 24.50 25.00
# Domestic Sales include excise duty also
* EBITDA - Earnings before Interest, Tax, Depreciation and Amortization.
The Global arm of Hindustan Levers Limited is Unilever's and its mission is to
add Vitality to life. Their products meet everyday needs for nutrition, hygiene, and
personal care with brands that help people feel good, look good and get more out
of life.
HLL has deep roots in local cultures and markets around the world which gives
them a strong relationship with their consumers, which are the foundation for
their future growth. They benefit from there wealth of knowledge and international
expertise to the service the local consumers - a truly multi-local multinational.
Brief History
In the summer of 1888, visitors to the Kolkata harbour noticed crates full of
Sunlight soap bars, embossed with the words "Made in England by Lever
Brothers". With it, began an era of marketing branded Fast Moving Consumer
Goods (FMCG). In 1931, Unilever set up its first Indian subsidiary, Hindustan
Vanaspati Manufacturing Company, followed by Lever Brothers India Limited
(1933) and United Traders Limited (1935). These three companies merged to
form HLL in November 1956; HLL offered 10% of its equity to the Indian public,
being the first among the foreign subsidiaries to do so. Unilever now holds
51.55% equity in the company. The rest of the shareholding is distributed among
about 380,000 individual shareholders and financial institutions. Pond's (India)
Limited had been present in India since 1947. It joined the Unilever fold through
an international acquisition of Chesebrough Pond's USA in 1986.
HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation
in 1994, which markets Huggies Diapers and Kotex Sanitary Pads. HLL has also
set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory
represents the largest manufacturing investment in the Himalayan kingdom. The
NLL factory manufactures HLL's products like Soaps, Detergents and Personal
Products both for the domestic market and exports to India.
The 1990s also witnessed a string of crucial mergers, acquisitions and alliances
on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired
Kothari General Foods, with significant interests in Instant Coffee. In 1993, it
acquired the Kissan business from the UB Group and the Dollops Icecream
business from Cadbury India.
In January 2000, in a historic step, the government decided to award 74 per cent
equity in Modern Foods to HLL, thereby beginning the divestment of government
equity in public sector undertakings (PSU) to private sector partners. HLL's entry
into Bread is a strategic extension of the company's wheat business. In 2002,
HLL acquired the government's remaining stake in Modern Foods.
In 2003, HLL acquired the Cooked Shrimp and Pasteurised Crabmeat business
of the Amalgam Group of Companies, a leader in value added Marine Products
exports.
Present Stature
Hindustan Lever Limited (HLL) is India's largest Fast Moving Consumer Goods
company, touching the lives of two out of three Indians with over 20 distinct
categories in Home & Personal Care Products and Foods & Beverages. They
endow the company with a scale of combined volumes of about 4 million tonnes
and sales of Rs.10,000 crores.
HLL is also one of the country's largest exporters; it has been recognised as a
Golden Super Star Trading House by the Government of India.
HLL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,
Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-
Annapurna, Kwality Wall's – are household names across the country and span
many categories - soaps, detergents, personal products, tea, coffee, branded
staples, ice cream and culinary products. They are manufactured in close to 80
factories. The operations involve over 2,000 suppliers and associates. HLL's
distribution network, comprising about 7,000 redistribution stockists, directly
covers the entire urban population, and about 250 million rural consumers.
HLL believes that an organization’s worth is also in the service it renders to the
community. HLL is focusing on health & hygiene education, women
empowerment, and water management. It is also involved in education and
rehabilitation of special or underprivileged children, care for the destitute and
HIV-positive, and rural development. HLL has also responded in case of national
calamities / adversities and contributes through various welfare measures, most
recent being the village built by HLL in earthquake affected Gujarat, and relief &
rehabilitation after the Tsunami caused devastation in South India.
Products
Product Category Product Name Brands
Lux
Pears
Soap Lifebuoy
Liril
Hamam
Breeze
Dove
Rexona
Personal Care Pond’s
Skin Care
Fair & Lovely
Sunsilk
Hair Care: Naturals
Clinic
Pepsodent
Oral Care
CloseUp
Axe
Deodorant
Rexona
Color Cosmetics Lakme
Ayurvedic Healthcare Aysh
3. GLAXO SMITHKLINE
Brand names such as Panadol the analgesic, Aquafresh toothpaste, Lucozade the
nutritional and Nicorette/ Niquitin smoking cessation products are household names
around the world. In one year GSK Consumer Healthcare produces - among many others
- nine billion tablets to relieve stomach upsets, six billion tablets for pain relief tablets
and 600 million tubes of toothpaste.
But the driving force behind GlaxoSmithKline's consumer healthcare business is science.
With four dedicated consumer healthcare R&D centres and consumer healthcare
regulatory affairs, the business takes scientific innovation as seriously as marketing
excellence and offers leading-edge capability in both.
The Company
The company has a challenging and inspiring mission: to improve the quality of human
life by enabling people to do more, feel better and live longer. This mission gives them
the purpose to develop innovative medicines and products that help millions of people
around the world. In fact, they are the only pharmaceutical company to tackle the World
Health Organization’s three ‘priority’ diseases – HIV/AIDS, tuberculosis and malaria.
Headquartered in the UK and with operations based in the US, it is one of the industry
leaders, with an estimated 7% of the world's pharmaceutical market.
As a company has a emphasized more on research & development, estimated every hour
they spend more than £300,000 (US$562,000) to find new medicines. The medicines
produced are mainly in six major disease areas – asthma, virus control, infections, mental
health, diabetes and digestive conditions. In addition, it is a leader in the important area
of vaccines and are developing new treatments for cancer.
GSK at a glance
History
1976
The H2 blocker Tagamet (cimetidine) is introduced in the UK by the SmithKline
Corporation, and in the US in the following year.
The treatment will revolutionise peptic ulcer therapy.
1978
Through the acquisition of Meyer Laboratories Inc, Glaxo’s business in the US is
started, to become Glaxo Inc from 1980.
The broad-spectrum injectable antibiotic Zinacef (cefuroxime) is introduced by
Glaxo.
1981
The anti-ulcer treatment Zantac (ranitidine) is launched by Glaxo and is to
become the world’s top-selling medicine by 1986. Augmentin (amoxicillin /
clavulanate potassium), to combat a wide range of bacterial infections in children
and adults, is launched by Beecham.
The antiviral Zovirax (aciclovir) is launched by Wellcome for herpes infections
1982
SmithKline acquires Allergan, an eye and skincare business, and merges with
Beckman Instruments Inc, a company specialising in diagnostics and
measurement instruments and supplies.
The company is renamed SmithKline Beckman. John Vane of the Wellcome
Research Laboratories is awarded the Nobel Prize, with two other scientists, "for
their discoveries concerning prostaglandins and related biologically active
substances."
1983
Glaxo Inc moves to new facilities in Research Triangle Park and Zebulon, North
Carolina. The broad-spectrum injectable antibiotic Fortum (ceftazidime) is
launched.
Wellcome launches Flolan (epoprostenol) for use in renal dialysis.
1986
Beecham acquires the US firm Norcliff Thayer, adding Tums antacid tablets and
Oxy skin care to its portfolio.
1987
The AIDS treatment Retrovir (zidovudine) is launched by Wellcome. Glaxo
introduces the oral antibiotic Zinnat (cefuroxime axetil).
1988
SmithKline BioScience Laboratories acquires one of its largest competitors,
International Clinical Laboratories, Inc, increasing the company's size by half and
establishing SmithKline BioScience Laboratories as the industry leader.
The Nobel Prize for medicine is awarded to George Hitchings and Gertrude Elion,
of Burroughs Wellcome Inc, and to Sir James Black, who had worked at the
Wellcome Foundation and Smith Kline and French Laboratories, "for their
discoveries of important principles for drug treatment."
1989
SmithKline Beckman and The Beecham Group plc merge to form SmithKline
Beecham plc. Engerix-B hepatitis B vaccine (recombinant), a genetically
engineered hepatitis B vaccine, is launched in the US and France.
1990
The synthetic lung surfactant Exosurf and the anti-epileptic drug Lamictal
(lamotrigine) are launched by Wellcome.
Glaxo introduces long-acting Serevent (salmeterol) for asthma, the inhaled
corticosteroid Flixotide (fluticasone propionate) and Zofran (ondansetron) anti-
emetic for cancer patients.
1991
Glaxo launches its novel treatment for migraine, Imigran (sumatriptan), Lacipil
(lacidipine) for high blood pressure, and Cutivate (fluticasone propionate) in the
US for skin diseases.
SmithKline Beecham moves its global headquarters to New Horizons Court at
Brentford, England. SmithKline Beecham’s Seroxat/Paxil (paroxetine
hydrochloride) is launched in the UK, its first market.
1992
Mepron (atovaquone) for AIDS-related pneumonia is introduced by Burroughs
Wellcome in the US.
SmithKline Beecham’s Havrix hepatitis A vaccine, inactivated, the world’s first
hepatitis A vaccine, is launched in six European markets.
1993
SmithKline Beecham and Human Genome Science negotiate a multi-million-
dollar research collaboration agreement for identifying and describing the
functions of the genes in the human body.
Glaxo introduces Flixotide (fluticasone propionate) for bronchial conditions.
1994
SmithKline Beecham purchases Diversified Pharmaceutical Services, Inc, a
pharmaceutical benefits manager.
Sterling Health also is acquired, making SmithKline Beecham the third-largest
over-the-counter medicines company in the world and number one in Europe and
the international markets.
With the intention of focusing on human healthcare, SmithKline Beecham sells its
animal health business.
1995
Glaxo and Wellcome merge to form Glaxo Wellcome.
Glaxo Wellcome acquires California-based Affymax, a leader in the field of
combinatorial chemistry.
Glaxo Wellcome’s Medicines Research Centre opened at Stevenage in England.
Valtrex (valaciclovir) is launched by Glaxo Wellcome as an anti-herpes successor
to Zovirax (acyclovir).
SmithKline Beecham acquires Sterling Winthrop's site in Upper Providence,
Pennsylvania, to fulfil US R&D expansion needs.
1996
Community Partnership is established by SmithKline Beecham to focus
philanthropy on community-based healthcare.
SmithKline Beecham Healthcare Services is formed by combining the clinical
laboratories, disease management and Diversified Pharmaceutical Services
businesses.
1997
SmithKline Beecham’s research centre, New Frontiers Science Park, opens at
Harlow in England.
SmithKline Beecham and Incyte Pharmaceuticals create a joint venture -
diaDexus - to discover and market novel molecular diagnostics based on the use
of genomics.
1998
SmithKline Beecham and the World Health Organization announce a
collaboration to eliminate lymphatic filariasis (elephantiasis) by the year 2020.
The largest pharmaceutical company in Poland is created with the acquisition of
Polfa Poznan by Glaxo Wellcome.
1999
The 30th anniversary of the launch of Ventolin (albuterol) is marked as respiratory
becomes Glaxo Wellcome’s largest therapeutic area.
Sharpening its focus on pharmaceuticals and consumer healthcare, SmithKline
Beecham divests SmithKline Beecham Clinical Laboratories and Diversified
Pharmaceutical Services.
GSK Products
Product name: Aquafresh
Major Markets
Aquafresh is one of the world's largest and fastest growing toothpaste and
toothbrush brands. The unique red, white and blue stripes of the toothpaste
make the product not only visually attractive, but also underline the triple benefits
of strong teeth, healthy gums and fresh breath – whole mouth protection. The
Aquafresh range of manual and electric toothbrushes not only clean teeth
effectively, they are also gentle on gums because of their flexible necks. Their
flexible heads and brush tips have been designed for cleaning even the hardest-
to-reach parts of the mouth. The Aquafresh range also includes whitening,
sensitive, tartar control and children's toothpaste, children's toothbrushes, dental
lozenges and dental gum.
Major Markets
• India
• Brazil
• South Africa and Thailand
ENO is the most global of GSK's gastrointestinal brands with sales of £29 million.
The fast-acting effervescent fruit salts, used as an antacid and reliever of
bloatedness, was invented in the 1850s by James Crossley ENO
Product name: Horlicks
Major Markets
India and UK
Horlicks, 'The Great Family Nourisher,' is a nutritional drink made from wheat,
milk and malted barley and is sold in powdered form. The brand is such an
enormous success in its key market, India, that alongside the traditional family
formula, there is a special formulation for children between one and three years
of age and another for breast-feeding mothers.
Financial review
Operating profit of £1,911 million grew by 13%, which was above the turnover
growth of 9%, reflecting an improved cost of sales margin and higher other
operating income partly offset by increased R&D expenditure. SG&A grew 8%.
Excluding costs for legal matters, SG&A grew by 2%, well below turnover growth.
In the quarter, gains from asset disposals were £91 million (£10 million in 2005),
costs for legal matters were £123 million (£33 million in 2005), the fair value
movements on the Quest collar and Theravance options were unfavorable £69
million (£9 million unfavorable in 2005) and net income related to restructuring
programmes was £4 million (£24 million charge in 2005). The total operating
profit impact of these items was a £97 million charge in 2006, compared with a
£56 million charge in 2005, resulting in a 2 percentage point reduction in
operating profit growth for the quarter.
Profit after taxation grew by 14% which was marginally higher than the growth in
operating profit and reflected lower net interest costs, partially offset by a higher
expected tax rate for the year.EPS of 23.3 pence increased 15% in CER terms
(14% in sterling terms) compared with Q2 2005. The adverse currency impact of
1% on EPS reflected exchange losses on settlement of foreign currency
balances in the quarter partly offset by a stronger dollar.
Operating profit
Q2 2006 Q2 Growth
2005
% of
% of turnove CER
£m turnover £m r % £%
––––– ––––
–––––– –––––– –––––– –––––– – –
Turnover 5,811 100.0 5,246 100.0 9 11
History
1975
Caprice hair care launches in Mexico. Today, hair care products are sold in over
70 countries, with variants to suit every type of hair need.
1976
Colgate-Palmolive acquires Hill's Pet Nutrition. Today Hill's is the global leader in
pet nutrition and veterinary recommendations.
1983
Colgate Plus toothbrush is introduced. Today over 1.6 billion Colgate
toothbrushes are sold annually worldwide. If you lined them up end to end, they
would circle the globe 16 times.
1985
Protex bar soap is introduced, and today offers all-family antibacterial protection
in over 56 countries. Colgate-Palmolive enters into a joint venture with Hong
Kong-based Hawley & Hazel, a leading oral care company, which adds strength
in key Asian markets.
1986
The Chairman's You Can Make A Difference Program is launched, recognizing
innovation and executional excellence by Colgate people.
1987
Colgate acquires Softsoap liquid soap business from the Minnetonka
Corporation. Today, Colgate is the global leader in liquid hand soap.
1989
Annual Company sales surpass the $5 billion mark.
1991
Colgate acquires Murphy Oil Soap, the leading wood cleaner in the U.S. Today,
its product portfolio has expanded to include all-purpose cleaners, sprays and
wipes.
1992
Colgate acquires the Mennen Company. Today, Mennen products are sold in
over 52 countries.
1995
Colgate enters Central Europe and Russia, expanding into fast-growing markets.
Colgate acquires Kolynos Oral Care business in Latin America and launches
market-leading Sorriso toothpaste.
1996
Bright Smiles, Bright Futures oral health education program expands to reach 50
countries with in-school programs and mobile dental clinics.
1997
Colgate Total toothpaste is introduced and quickly becomes the market leader in
the U.S. Only Colgate Total, with its 12-hour protection, fights a complete range
of oral health problems.
2004
Colgate acquires the GABA oral care business in Europe, with its strength in the
important European pharmacy channel and its ties with the dental community.
2006
Today, with sales surpassing $10 billion, Colgate focuses on four core
businesses: Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate
now sells its products in 222 countries and territories worldwide.
Products
Oral Care:
• Colgate – Toothpaste, Tooth Powder, Whitening Products
• Pamolive - Shower Gel, Shower Cream, Bar Soap, Liquid Hand Wash,
Shave Preps, Skin Care
Household Care:
• Axion Surface Clean
5. BRITANIA
The story of one of India's favorite brands reads almost like a fairy tale. Once
upon a time, in 1892 to be precise, a biscuit company was started in a
nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295.
The company we all know as Britannia today.
The beginnings might have been humble-the dreams were anything but. By
1910, with the advent of electricity, Britannia mechanized its operations, and in
1921, it became the first company east of the Suez Canal to use imported gas
ovens. Britannia's business was flourishing. But, more importantly, Britannia was
acquiring a reputation for quality and value. As a result, during the tragic World
War II, the Government reposed its trust in Britannia by contracting it to supply
large quantities of "service biscuits" to the armed forces.
As time moved on, the biscuit market continued to grow and Britannia grew along
with it. In 1975, the Britannia Biscuit Company took over the distribution of
biscuits from Parry's who till now distributed Britannia biscuits in India. In the
subsequent public issue of 1978, Indian shareholding crossed 60%, firmly
establishing the Indianness of the firm. The following year, Britannia Biscuit
Company was re-christened Britannia Industries Limited (BIL). Four years later in
1983, it crossed the Rs. 100 crores revenue mark.
On the operations front, the company was making equally dynamic strides. In
1992, it celebrated its Platinum Jubilee. The Wadia Group acquired a stake in the
company and became an equal partner with Groupe Danone in Britannia. The
subsequent year saw sales cross landmark 100,000 tones of biscuits or 1 billion
packs of 100g.
Britannia strode into the 21st Century as one of India's biggest brands and the
pre-eminent food brand of the country. It was equally recognized for its innovative
approach to products and marketing: the Lagaan Match was voted India's most
successful promotional activity of the year 2001 while the delicious Britannia 50-
50 Maska-Chaska became India's most successful product launch. In 2002,
Britannia's New Business Division formed a joint venture with Fonterra, the
world's second largest Dairy Company, and Britannia New Zealand Foods Pvt.
Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global
rated Britannia 'One amongst the Top 200 Small Companies of the World', and
The Economic Times pegged Britannia India's 2nd Most Trusted Brand.
Today, more than a century after those tentative first steps, Britannia's fairy tale is
not only going strong but blazing new standards, and that miniscule initial
investment has grown by leaps and bounds to crores of rupees in wealth for
Britannia's shareholders. The company's offerings are spread across the
spectrum with products ranging from the healthy and economical Tiger biscuits to
the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the
trust of almost one-third of India's one billion population and a strong
management at the helm means Britannia will continue to dream big on its path
of innovation and quality. And millions of consumers will savour the results,
happily ever after.
•
1997• Re-birth - new corporate identity 'Eat Healthy, Think Better'
leads to new mission: 'Make every third Indian a Britannia
consumer'
• Britannia Khao World Cup Jao rocks the consumer lives yet
again
2004• Britannia accorded the status of being a 'Superbrand'
• Volumes cross 3,00,000 tons of biscuits
PRODUCTS
Financial Performance
Year ended 31st March 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Assets employed
Fixed assets less depreciation 714 853 1277 1353 1306 1588 1632 1481 1283 1277
& amortisation 871 731 912 1293 1470 2156 3104 2969 2913 3300
Investments 68 78 7 18 65 257 592 747 43 (423)
Net current assets 122 163 217 260 463 342
Miscellaneous Expenditure
1653 1662 2196 2664 2963 4164 5545 5457 4702 4496
Financed by
Equity shares 186 186 186 186 279 279 269 259 251 239
Reserves & Surplus 741 838 1026 1308 1586 2123 3430 3653 4059 4196
Loan funds 726 638 984 1170 1098 1762 1846 1545 392 61
1653 1662 2196 2664 2963 4164 5545 5457 4702 4496
6. DABUR INDIA
Dabur India Limited is a leading Indian consumer goods company with interests
in health care, Personal care and foods. Over more than 100 years we have
been dedicated to providing nature-based solutions for a healthy and holistic
lifestyle.
Through our comprehensive range of products we touch the lives of all
consumers, in all age groups, across all social boundaries. And this legacy has
helped us develop a bond of trust with us.
1979 Sahibabad factory / Dabur Research Foundation
1986 Public Limited Company
1992 Joint venture with Agrolimen of Spain
1993 Cancer treatment
1994 Public issues
1995 Joint Ventures
1996 3 separate divisions
1997 Foods Division / Project STARS
1998 Professionals to manage the Company
2000 Turnover of Rs.1,000 crores
2003 Dabur demerges Pharma Business
2005 Dabur aquires Balsara
2006 Dabur announces Bonus after 12 years
2006 Dabur crosses $2 Bin market Cap, adopts US GAAP
Tastes like eating a 100% Natural Fruit Juice Pure natural Honey
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FINANCIAL PERFORMANCE
(Rs. in Cr.)
7. GODFREY PHILLIPS
Godfrey Phillips is today the second largest player in the Indian cigarette industry
with an annual turnover of over US$ 265 million.
The Company today is the proud owner of some of the most popular cigarette
brands in the country like Red and White, Four Square, Jaisalmer, Cavanders,
Tipper and Prince. Its products are distributed through an extensive India wide
network comprising 484 exclusive distributors and over 800,000 retail outlets.
Godfrey Phillips has two major stakeholders, one of India's leading industrial
houses - the K.K. Modi Group and one of the World's largest tobacco companies,
Philip Morris. Godfrey Phillips has the strong backing of over 15,000
shareholders in the Country and is today, through the sheer determination &
passion of every employee of the organization, growing from strength to strength.
From its modest beginning in London way back in 1844, Godfrey Phillips, a major
player in the Indian tobacco industry, has come a long way.
The history of the Company reflects the strong determination and passion
amongst the founders & the employees of the Company to establish itself as a
leader of the tobacco industry in the Country.
Mr. Godfrey Phillips, founder of Godfrey Phillips & Sons commenced business in
the Barbican (London), as a Cigar manufacturer in 1844. From the Barbican he
moved to Primrose Street and after that to Commercial Street London. B.D.V, the
packet tobacco with which the name of Godfrey Phillips was intricately
connected, is practically contemporary with Mr. Phillips embarkation in tobacco
cutting in the year 1887.
At that time packet tobaccos were in their infancy. After B.D.V. came "Marigold"
and Guinea Gold. Mr. Phillips, a splendid judge of tobacco himself, looked for
appreciation of quality in his customers and stuck to his belief that quality will
ultimately determine success, something that is still the strongest belief in the
Company. Messrs Godfrey Phillips, D.H. Wilmer and H.C. Water incorporated
GODFREY PHILLIPS INDIA as a Private Ltd. Co. on 3rd December 1936. The
Company imported cigarettes from Godfrey Phillips Ltd. U.K.
In the year 1942, plans for setting up a manufacturing facility in Calcutta were
made, however it got shelved due to World War II. In 1944, after the war,
GODFREY PHILLIPS bought Master Tobacco Co., Chakala, Andheri (Mumbai)
thereby establishing its first factory in the Country. In October 1946, GODFREY
PHILLIPS became a Public Ltd. Co. with its manufacturing operations in Mumbai.
In 1967, D. Macropolo & Co., which was the sole selling agent for GODFREY
PHILLIPS, opened a subsidiary company called "International Tobacco Co.", with
its manufacturing facility in Ghaziabad (near Delhi) to manufacture cigarettes for
GODFREY PHILLIPS.
In 1973 GODFREY PHILLIPS, successfully launched Four Square Kings, India 's
first King Size filter cigarette. It was the sheer passion to be close to the
consumer that helped the Company recognize the demands of the emerging
consumer long before anyone in the cigarette industry.
In 1979, Philip Morris. joined hands with the K.K. Modi Group and in the
following year the Modi Enterprises took over the management of GODFREY
PHILLIPS with a substantial financial stake. Modi enterprise was new to the
cigarette business, but an area in which they saw a huge potential for growth.
They took on this new challenge with a lot of passion, vigour and confidence.
The business was given a fresh look in all its areas of operation. Professional
managers were inducted to head the various functions to bring about change and
vigor in the organization to meet the challenges of the eighties. The existing
brand franchises were rejuvenated, each brand was modernized with the prime
objective of growing their brand equity. Modernization of the factories was
initiated; product development and research activities were stepped up.
Aggressive marketing and sales strategies were drawn up and implemented and
each employee was empowered to bring about the desired change. Everything
was restarted with renewed passion and determination.
Godfrey Phillips is best known by the brands it manufactures and today the
Company is the proud owner of some of the best FMCG brands of the country. At
least 3 of our cigarette brands today feature in the top 50 FMCG list. They are:
Four Square Special, Red & White and Cavanders.
Apart from these champions, the Company also has other cigarette brands that
cater to a large and varied range of consumer segments.
The year 2002 also saw the Company re-launch some of its brands, by giving
them an entirely new look & positioning, while some new, innovative products
were also introduced. These brands are already making their presence felt in the
industry. They are: Jaisalmer (re-launched in 2003), Tipper & Piper (new
innovative products introduced in 2002) and Prince (another re-launch for the
year 2002).
Prepared with utmost dedication and passion, to deliver the customer with the
most satisfying smoke, each cigarette going out into the market bears the
Godfrey Phillips stamp of quality and assurance.
Cigarette
• Four Square
• Jaisalmer
• Red & White
• Cavanders
• Tipper
• North Pole
• Prince
Cigars - Brands
• Don Diego
• Hav-a-tampa
• Phillies
• Santa Damiana H-2000 Rothschild
8. GODREJ
The foods division of Godrej Industries produces and markets edible oils,
vanaspati, fruit drinks, fruit nectar and bakery fats.
Godrej Industries, in keeping with the philosophy of the Godrej Group, believes
that quality is the product of a combination of man and machine. The foods
division has people of outstanding caliber to go with the modern technologies it
uses. The result: the ability to deliver outstanding products.
Soymilk is the rich creamy milk of whole soybeans. With its unique nutty flavor
and rich nutrition, soymilk can be used in a variety of ways.
Soymilk is free of the milk sugar lactose and is a good choice for people who are
lactose intolerant. Also, it is a good alternative for those who are allergic to cow's
milk. Children can enjoy homemade or commercially prepared soymilk after the
age of 1 year. Infants under 1 year of age should be fed breast milk,
commercially prepared infant formula or commercial soymilk infant formula.
9. NIRMA
Nirma is one of the few names - which is instantly recognized as a true Indian
brand, which took on mighty multinationals and rewrote the marketing rules to
win the heart of princess, i.e. the consumer.
Nirma, the proverbial ‘Rags to Riches’ saga of Dr. Karsanbhai Patel, is a classic
example of the success of Indian entrepreneurship in the face of stiff competition.
Starting as a one-man operation in 1969, today, it has about 14, 000 employee-
base and annual turnover is above Rs. 25, 00 crores.
India is a one of the largest consumer economy, with burgeoning middle class
pie. In such a widespread, diverse marketplace, Nirma aptly concentrated all its
efforts towards creating and building a strong consumer preference towards its
‘value-for-money’ products.
It was way back in ‘60s and ‘70s, where the domestic detergent market had only
premium segment, with very few players and was dominated by MNCs. It was
1969, when Karsanbhai Patel started door-to-door selling of his detergent
powder, priced
at an astonishing Rs. 3 per kg, when the available cheapest brand in the market
was
Rs. 13 per kg. It was really an innovative, quality product – with indigenous
process, packaging and low-profiled marketing, which changed the habit of
Indian housewives’ for washing their clothes. In a short span, Nirma created an
entirely new market segment in domestic marketplace, which is, eventually the
largest consumer pocket
and quickly emerged as dominating market player – a position it has never since
relinquished. Rewriting the marketing rules, Nirma became a one of the widely
discussed success stories between the four-walls of the B-school classrooms
across
the world.
The performance of Nirma during the decade of 1980s has been labeled as
‘Marketing Miracle’ of an era. During this period, the brand surged well ahead its
nearest rival – Surf, which was well-established detergent product by Hindustan
Lever. It was a severing battering for MNC as it recorded a sharp drop in its
market share. Nirma literally captured the market share by offering value-based
marketing mix of four P’s, i.e. a perfect match of product, price, place and
promotion.
Now, the year 2004 sees Nirma’s annual sales touch 800,000 tones, making it
one of
the largest volume sales with a single brand name in the world. Looking at the
FMCG synergies, Nirma stepped into toilet soaps relatively late in 1990 but this
did not deter it to achieve a volume of 100,000 per annum. This makes Nirma the
largest detergent and the second largest toilet soap brand in India with market
share of 38% and 20% respectively.
Products
ITC's diversified status originates from its corporate strategy aimed at creating
multiple drivers of growth anchored on its time-tested core competencies:
unmatched distribution reach, superior brand-building capabilities, effective
supply chain management and acknowledged service skills in hoteliering. Over
time, the strategic forays into new businesses are expected to garner a
significant share of these emerging high-growth markets in India.
Products
• Cigarettes
ITC is the market leader in cigarettes in India. With its wide range of
invaluable brands, it has a leadership position in every segment of the market. Its
highly popular portfolio of brands includes Wills, Insignia, India Kings,
Gold Flake, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake.
• Foods
ITC made its entry into the branded & packaged Foods business in August
2001 with the launch of the Kitchens of India brand. A more broad-based entry
has been made since June 2002 with brand launches in the Confectionery,
Staples and Snack Foods segments.
The packaged foods business is an ideal avenue to leverage ITC's proven
strengths in the areas of hospitality and branded cuisine, contemporary
packaging and sourcing of agricultural commodities. ITC's world famous
restaurants like the Bukhara and the Dum Pukht, nurtured by the Company's
Hotels business, demonstrate that ITC has a deep understanding of the Indian
palate and the expertise required to translate this knowledge into delightful dining
experiences for the consumer.
The Foods business is today represented in 4 categories in the market.
These are:
• Lifestyle Retailing
Over the last six years, ITC's Lifestyle Retailing Business Division has
established a nationwide retailing presence through its Wills Lifestyle chain of
exclusive specialty stores. Beginning with its initial offering of Wills Sport
relaxed wear from the first store at South Extension, New Delhi in July 2000,
it has expanded its basket of offerings to the premium consumer with Wills
Classic work wear, Wills Clublife evening wear and a tempting range of
designer accessories that complete the Look.
ITC's stationery brands Paper Kraft & Classmate are the most widely
distributed brands across India. ITC's Greeting & Gifting products include
Expressions greeting cards and gifting products like autograph books, slam
books, party invitations, pop up & mini books. The business also markets
Expressions Regalia, a collection of premium greeting cards & social cause
cards & desk calendars in association with SOS Children's Villages of India.
Expressions greetings & gifting products are available in multi brand retail outlets
across India.
(Rs. in Crores)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
GROSS
5188 5991 6924 7701 8069 8827 9982 11194 12040 13585
INCOME
Excise Duties
2580 3078 3694 4063 4134 4475 4781 5159 5345 5710
etc.
Net Income 2608 2913 3230 3638 3935 4353 5202 6035 6695 7875
Cost of Sales 2024 2143 2271 2443 2475 2516 3156 3712 4110 4847
PBDIT 584 770 958 1194 1460 1836 2046 2323 2585 3028
PBDT 500 650 877 1040 1347 1740 1979 2294 2561 2986
Depreciation 48 63 86 102 119 140 198 237 242 313
PBIT 536 707 873 1092 1342 1696 1847 2086 2344 2716
PROFIT
452 587 791 938 1229 1600 1780 2056 2319 2673
BEFORE TAX
Tax 191 240 265 315 437 594 591 685 726 836
PROFIT
AFTER TAX
BEFORE 261 347 526 623 792 1006 1190 1371 1593 1837
EXCEPTIONAL
ITEMS
EXCEPTIONAL
ITEMS (NET 354
OF TAX)
PROFIT
AFTER 261 347 526 623 792 1006 1190 1371 1593 2191
TAXATION
Dividends 61 108* 121* 150* 225* 270* 334 419* 559* 882*
Retained Profits 200 239 405 474 568 736 856 953 1034 1310
Earnings Per Share on profit after tax before exceptional items
Basic (Rs.) 10.64 14.14 21.44 25.40 32.29 41.00 48.07 55.41 64.34 73.74
Adjusted @
34.05 45.25 68.61 81.28 103.33 131.20 155.14 178.81 207.69 239.54
(Rs.)
Earnings Per Share on profit after taxation
Basic (Rs.) 10.64 14.14 21.44 25.40 32.29 41.00 48.07 55.41 64.34 87.97
Adjusted @
34.05 45.25 68.61 81.28 103.33 131.20 155.14 178.81 207.69 285.74
(Rs.)
Dividend Per
2.50 4.00 4.50 5.50 7.50 10.00 13.50 15.00 20.00 31.00
Share (Rs.)
Market
5571 8792 17523 23633 18038 19987 17243 15581 25793 33433
Capitalisation **
Foreign
Exchange 619 635 759 650 688 697 948 1294 1078 1269
Earnings
An
Assignment
on
FMCG Industry
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