With competition growing in the fast-moving consumer goods (FMCG) industry, the company has increased its total marketing investments in advertising and promotion to its highest level ever in support of both new and existing products. Subsequently, the company embarked on an "investing for the future" programme focusing on business building, infrastructure and supply chain projects.

Dam told shareholders that the performance for the year 1998-99, therefore, should be viewed in the context of the investment plans. He, however, added that the board is confident of providing a longer time benefit to shareholders.

Colgate-Palmolive made an expenditure of Rs 148 crore in advertising during 1997-98, as against Rs 104 crore in the previous year.

Dam said that the first five months ofthe current year remained sluggish on account of the recessionary market conditions.

On the newly launched oral care products, Colgate Double Protection and Colgate Total, Dam said that these have been competitively priced to boost volumes and further strengthen its market leadership.

He said that considering the low per capita consumption at about 107 gms of the oral care product in India, the market potential for expansion is huge. This, he said, would come from strategic investment and an increased ad spend.

"What is important is to remain competitive in the market place from the point of view of cost, price, advertising, product and manufacturing. This can be achieved only if the company focuses on its fundamentals: grow volumes, reduce costs, maximise on price for an optimal gross margin, and invest more in advertising to drive the topline growth," said Dam.

Stressing on the above points and the fact that dividend payout was slashed during 1997-98 so as to plough back funds into the business,managing director N Jayaraman said, "The company intends to expand the market to its fullest."

Dam also said that in India, where the company's market share in oral care at 60 per cent is higher than the world average of 45 per cent, the company intends to continue focusing strongly on oral care and hence the reason to invest in research and development (R&D).

The company will continue to focus on new product developments at the R&D centre which is coming up at Powai in Mumbai. The centre will also cater to the African continent in addition to the Indian sub-continent.