Godrej Consumer Shelves Plan To Launch Insecticides In Africa
Godrej Consumer expects high single-digit volume growth in FY18
Godrej Consumer Products Ltd. has put on hold the launch of insecticides in Africa for the next 12 months while it continues to focus on and expand its hair care business in the continent.
The consumer goods major is still piloting and experimenting with the insecticides segment in various parts of Africa, Vivek Gambhir, managing director and chief executive officer of Godrej Consumer told BloombergQuint. “I don’t expect any insecticides launches over the next 12 months,” Gambhir said.
The company had earlier planned to take its Good Knight brand to the continent within the year.
The fast moving consumer goods major will focus on expanding the hair care segment in Africa and has set up two manufacturing facilities – in Nairobi, Kenya and in Lagos, Nigeria – and has also set up a third party manufacturing facility in South Africa.
“For the time being though, our focus will be far more on the hair products range. We are just launching and scaling our new wet hair products in Africa,” said Gambhir.
Growth Targets
Godrej Consumer hopes to achieve high-single digit volume growth in the current financial year despite flat volume growth in the first quarter. The company also expects volume-led growth in hair colours, soaps and household insecticides segments in India.
GST-Related Worries
The company, which struggled with the transition to the Goods and Services Tax (GST) in the quarter, said urban traders have made the switch, the process is still on for smaller wholesalers. The GST-related disruption will normalise in the July-September quarter, the Godrej Consumer had said in its exchange filing earlier in the day.
The company missed analysts’ estimates in the April-June quarter due to de-stocking ahead of GST and higher investments.
Net profit fell 9 percent to Rs 225 crore compared to the corresponding quarter last year, according to the company’s exchange filing. Revenue increased 3.5 percent to Rs 2,271 crore, falling short of the Rs 2,322 crore consensus of analysts. Sales growth was impacted by GST-led cautiousness in trade in June, the company said in its press release. Margins contracted 200 basis points to 16 percent.
