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Marico Industries eyes P&G's shampoo brand Mediker
Our Bureau
Mumbai, Jan 20: Marico Industries, manufacturers of the leading hair-oil, Parachute, is understood to have evinced an interest in acquiring Procter & Gamble's (P&G's) medicated shampoo brand, Mediker. Mediker is one of three brands, besides the two detergent brands Ezee and Trilo, P&G has put on the block.Marico's interest in Mediker comes after British multinational Reckitt & Colman and P&G's erstwhile partner, Godrej, reportedly expressed their disinterest in these brands. Investment banker ING Barings has been entrusted with the task of finding a buyer for the American consumer products giant's three brands. No official confirmation from the Marico management was, however, available.Analysts said Marico's interest in Mediker could possibly mean the company was exploring the possibility of extending its hair-care range to cover medicated shampoos. "Marico's move is obviously an entry-point strategy into this niche segment, with a view to covering the entire hair-care segment eventually," an analyst
said. Marico's Parachute brand is currently estimated to command over 50 per cent of the hair-oil market. Mediker, which contributes about 1 per cent to P&G's sales, is not a "bread-winner" brand for the company, though analysts feel it holds tremendous potential given the paucity of major competition in this segment. Mediker, an anti-lice shampoo brand, essentially competes with the Licel in the market. Analysts said P&G could be looking at a price of anywhere between 1.5 and two times the product's sales of about Rs 6-7 crore. The price is in line with Reckitt and Colman's acquisition cost of Rs 12 crore (at about 2.18 times sales) for the Burnol brand, though the two are not strictly comparable. Analysts said P&G's decision to hawk three brands was a step towards concentrating on building volumes in other profitable products like Vicks and Whisper. P&G is a market leader in its core business of anti-cold over-the-counter drugs and feminine hygiene-care products. Marico Industries posted a net
profit of Rs 17.19 crore in the first half of the current fiscal, ended September 30, 1997, against Rs 11.27 crore in the same period last year. The company's turnover touched Rs 227 crore during the period.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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