News: Godrej eyes buyouts in China, Brazil

(TT 28/11/2006) New Delhi - Godrej Industries Limited is looking at acquisitions in emerging countries, including China and Brazil, as part of its expansion strategy.

“We are looking at expanding our core business of hair colour and household insecticides in emerging markets like Brazil, China and some African countries like Nigeria by exploring acquisition opportunities in these markets,” Godrej group chairman Adi B. Godrej said on the sidelines of the India Economic Summit.

The Godrej group has acquired companies in the UK and South Africa. According to Godrej, approximately 25 per cent of the revenues in the FMCG goods segment come from the export market.

The FMCG market has been growing at 15 per cent and the company expects to better the industry growth, he said. Increasing input costs such as those for packaging and freight have forced FMCG companies to hike prices of products, he added.

The company has already increased its soap prices because of pressure on margins. However, Godrej declined to comment on a similar price hike in other segments.

Godrej is now focussing on real estate through group company Godrej Properties.

“We are developing about 20 million square feet of properties in Maharashtra, Hyderabad and Bangalore. Several of our projects have been completed,” he said.

The company’s profit after tax for the quarter ended September 30 remained unchanged at Rs 12.6 crore from the same quarter in the previous fiscal.

Total income in the quarter grew 6 per cent to Rs 207 crore from Rs 195.28 crore in the corresponding quarter of the previous fiscal.

For the half-year period ended September 30, the company recorded a 33 per cent increase in profit after tax at Rs 29.2 crore compared with Rs 21.95 crore in the first half of 2005-06.

Total income for the six-month period rose 9 per cent to Rs 394 crore from Rs 361.46 crore in the same period last year.