CALCUTTA, May 7: Reckitt & Colman of India, the household products and toiletries company, is projecting an annual growth of 30 per cent in 1997 against the average growth of 19 per cent per annum in the last six years.

This growth, company sources said, will be propelled by a bigger market for most of its products and increased capacities in household products and pharmaceuticals.

The 51-per-cent subsidiary of Britain's Reckitt & Colman plc has almost doubled its advertising and marketing budget for 1997 to Rs 42 crore from Rs 24 crore in 1996. This is still much below the spending levels of other consumer products multinationals like Hindustan Lever and Procter & Gamble.

In 1996, Reckitt's advertising expenditure was 8.29 per cent of sales against a level of 12 per in other comparable companies.

Reckitt & Colman's managing director Ashok Pradhan, said: "sales of Mortein coils [a mosquito repellent -- are expected to double in the current year to about Rs 46 crore from Rs 23 crore achieved in 1996. The company will launch more products in the current year but product launches will be spaced out for better market penetration."

Talking about falling margins, Pradhan explained that in the previous year the company was operating on thin margins to face competition and concentrating on keeping costs under check.

Chairman P K Choksey told shareholders at the annual general meeting earlier on Tuesday that turnover in the first three months of the current year was Rs 80 crore, 36.2 per cent higher than that achieved in the corresponding period last year.

Choksey said the company was worried about the provision in the Union budget this year on the levy of excise duty on certain toiletry products on the basis of maximum retail price.

"This measure, if implemented, would hurt the company and result in additional burden on the consumer if the company decided to increase its prices to maintain its margins," Choksey said. "This will also offset the advantage of the 2 per cent reduction in excise on all the company's products announced in this year's budget."

Regarding the sale of Binaca brand last year to Dabur for a consideration of Rs 1.2 crore, Choksey said the cost to the company for the acquisition of this brand from the British parent was nil.

The company had sold its rights in India only. Its marketing rights in Nepal remained intact. Since the company's brand was lying idle as it had shelved its toothpaste manufacturing plans, the management decided to sell the brand, he added.

In 1997, bulk of the increased volumes will come from the insecticides plant in Hosur where the capacity has been increased from two lines to 10 lines.

In addition, the company is increasing capacities in PCMX (raw material for Dettol) and triclosan.

Besides, the production capacity in the Mysore pharmaceuticals plant is being increased from 600 million to 900 million tablets per annum. The main products of this plant are Disprin, Colsprin and Gaviscon.

From the current year, the company is going on a rural marketing drive to push household products like Dettol, fabric whitener Robin Blue, and shoe polish Cherry Blossom in towns and villages.

The company is aiming for extra sales of Rs 10 crore from the rural market in 1997.

In 1996 the company launched several new products like Lizol, Woolite, Dettol shaving cream and gel and Harpic Flushmatic for toilet care.

Simultaneously, the company is going in for rapid indigenisation of costly imported raw materials. Among its future plans are introduction of new products in pest control (household insecticides), disinfectant liquid, home hygiene and substitution of imported Carnauba wax with indigenous material.

The Reckitt scrip has in the last couple of weeks shown a firming tendency on the bourses and was last traded on Lyons Range at Rs 242.50 on May 6.

Marketmen report that Merrill Lynch is bullish on the scrip and has been accumulating from Rs 220 levels.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.