Godrej Consumer Product Limited reports strong performance

Sales up by 35%, PBT at Rs.13.8 Crore.

Mumbai, 26th July 2001

Godrej Consumer Products Limited (GCPL) has shown healthy growth in its first Quarter Results for the period ended 30th June 2001 registering a net profit (PBT) of Rs.13.8 crore. Gross Profit (PBIDT) for the period is Rs.17.6 crore.

The Company has performed well with sales turnover for the quarter growing by 35% to Rs.140.4 crore as against Rs.103.9 crore (Sales of the Consumer Products Division of the former Godrej Soaps Limited) for the same period last year. The sales of Godrej brands grew by 26% to Rs.104.9 crore as against Rs.83.3 crore for the corresponding quarter last year.

Announcing the results, Mr. Adi Godrej, Chairman said, "These results confirm our belief in the benefits of the demerger. Godrej Consumer Products Limited is poised to create greater value for shareholders. The first quarter has seen impressive growth in both the top-line and bottom-line for the new company. Strategic restructuring initiatives taken up are showing strong results. The year will see greater focus on brand building and sales growth. We are undertaking a number of business initiatives to improve performance and enhance shareholder value."

Brands

During the Quarter ended 30th June 2001, GCPL sales grew ahead of industry growth. GCPL's brands of Toilet Soaps grew 23% by value, far ahead of the industry, which had a negative growth. GCPL growth in the soaps sector was helped by lower operating costs, which helped improve product margins, which were, in turn, ploughed back into consumer offers and trade promotions to grow volumes.

During the quarter, the Contract Manufacturing business showed strong growth of 72% as against the same period last year.

Hair Colour products grew 27% by value with Godrej Powder Hair Dye sachet helping GCPL to increase rural market penetration and becoming the largest selling hair dye in the rural Indian market (Market share of 32%). Colour Soft Liquid Hair Colour range has also shown strong growth with the addition of a fourth colour variant. The recently launched Godrej Kesh Kala has shown good progress.

With focus on the Personal, Hair and Fabric Care market segments, GCPL is poised to launch various new innovative products in these segments through its strategic Innovation Funnel process.

Exports

Exports during the period ended 30th June 2001, registered a growth of 167%. Godrej Fairglow soap and cream have received encouraging response from markets like Malaysia, Singapore, Sri Lanka and some countries in the African Continent. The brand will soon be introduced in Indonesia and Maldives together with other Godrej brands. Plans are also afoot to foray into the South American markets.

E-commerce & IT

A large number of strategic e-commerce initiatives have been undertaken by GCPL to harness the power of technology for business benefits. The current ERP implementation is being upgraded to a Web-based version. A complete web-based Supply Chain Management solution is being put into place, alongwith a large extranet for the Distribution system to improve data connectivity.

Strategic Initiatives

The Company is implementing an EVA based financial measurement & reward system under the guidance of Stern Stewart & Company. Two cross-functional teams of young executives are working to chalk out a 3 year strategic plan. A Think Tank has also been set-up to advise the Group Executive Committee on futuristic developments in areas like information technology, science, R&D, human resource trends and others. A Young Executive Board to advise the Group Executive Committee will be set up effective October 1, 2001.

GCPL is a result of the demerger of the Consumer Products Division of the former Godrej Soaps Limited. With effect from April 1st 2001, Godrej Soaps Limited has been renamed as Godrej Industries Limited. GCPL is listed on the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and Stock Exchanges at Chennai, Kolkata, Delhi and Ahmedabad.

Godrej Consumer Products Ltd is a major player in the Indian FMCG market with presence in the personal, hair, household and fabric care segments. It has leading brands such as CINTHOL, Godrej FAIRGLOW, Godrej ALLCARE, Godrej NIKHAR, GODREJ No.1, and SHIKAKAI range of soaps, Godrej FAIRGLOW Fairness Cream, GODREJ shaving cream & hair dyes, COLOUR SOFT Hair Colour, COLOUR GLOSS Shampoo and EZEE liquid detergent. With a turnover of Rs. 470 crore (for the Consumer Products Division of the former Godrej Soaps Limited), the company employs about 900 persons and has two modern manufacturing facilities at Malanpur (M.P.), and Silvassa (Dadra & Nagar Haveli.). Associate Companies include Godrej Industries Ltd., Godrej Sara Lee Ltd., Godrej Foods Ltd., Godrej Agrovet Ltd. and Godrej Properties and Investments Ltd.