Marico Ltd. will slow down its expansion in Africa as the consumer goods maker's revenues fell in the continent over the last financial year largely due to economic issues and currency fluctuations.
Africa is a difficult market and the company is “less bullish as far as expanding in Africa” is concerned than it was two to three years ago, Saugata Gupta, managing director and chief executive officer of Marico, told BloombergQuint. “We will go slow on the Africa expansion.”
The company's revenue from the Middle East and North Africa declined 46 percent (constant currency basis) in the quarter ended March year-on-year and also fell 13 percent in financial year 2016-17. Consumption fell in the Middle-East but Gupta expects a turnaround in the ongoing financial year.
The company's revenue from international operations in FY17 stood at Rs 1,356.5 crore, with the Middle East and North Africa region contributing 15 percent and South Africa 7 percent.
Also Read: Marico Guns For Double-Digit Revenue Growth In FY18
Its revenue in South Africa rose 6 percent on a constant-currency basis in the January-March quarter even as the country is battling economic issues and a volatile currency. The South African Rand appreciated by over 6 percent in FY17.
The FMCG major sells hair, personal and healthcare brands like Caivil, Hercules, Black Chic, Just for Baby, INGWE, Grace, Rivage, Karazel and Kamillen in South Africa.
The Egyptian pound has depreciated by 52 percent against the Indian rupee in the last 12 months, according to Marico's press release. However, the company expects its business in Egypt to pick up in the second half of 2017-18, Gupta said. Even if there is constant-currency growth in the first half, it will translate into a growth in rupee terms only in the second half, he said.
Marico has three variants under the Parachute brand and also Finacee and Hair Code brands in Egypt.
The other Indian consumer goods companies which have a presence in Africa are Dabur India Ltd., Godrej Consumer Products Ltd. and Emami Ltd.
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