Marico learns to juggle old and new businesses after acquiring Paras’s personal care brands

Marico’s Unique Paras Strategy

by Samar Srivastava | Aug 7, 2013

Marico learns to juggle old and new businesses after acquiring Paras’s personal care brands


When Marico decided to try on a new hat, it also committed itself to a different, more vibrant, personality. Juggling personas was never going to be easy but here’s proof that the company known for its steadiness, manifested in brands like Saffola and Parachute, is ready to step away from its long-standing staid avatar.  Consider this advertisement. Its narrative goes like this: Two young television jockeys are shown complaining about the quality of participants at a talent hunt. “Pata nahi kahaan se aa jaate hain. Unko maloom nahi, yeh talent hunt hai, unki gaon ki nautanki nahi [Don’t know where they land up from. They don’t know, this is a talent hunt, not a village nautanki],” says one dismissively. On cue, the maligned participant pulls out a can of Zatak deodorant; the cap flies across the room and lodges itself in the jockey’s mouth rendering him unable to speak while the participant sprays himself. ‘Who’s the cool one now?’ the advertisement seems to ask. The jockeys are humbled and the underdog prevails.The tone of this campaign is in-your-face, suggesting a departure from Marico’s traditional approach—remember the Parachute hair oil commercials? Significantly, this is a sign of the leap of faith Marico is taking as it digests the acquisition of Paras Pharmaceuticals’ personal care brands. It completed the Rs 760-crore purchase from Reckitt Benckiser (the UK consumer goods giant had earlier acquired those brands from Paras) last July and has been on a learning curve since then.

Winds of change
Prompted by the sluggishness in its core businesses of hair oil and cooking oil, Marico had, a few years ago, taken a strategic call to tap new categories. “We wanted to enter categories that create tailwinds,” says Saugata Gupta, CEO, Marico. He means businesses that are poised to grow faster given that they cater to the 250 million Indians under the age of 35.

Subsequently, in 2010, it launched breakfast cereals under the Saffola brand and has since garnered an impressed 14 percent share in the category behind market leader Quaker Oats.

Personal care presented an opportunity with significantly better growth rates. In late 2011, when Reckitt Benckiser—which had bought the Set Wet hair gel, Zatak deodorant and Livon hair serum brands from Paras—put them up for sale, Marico was quick to enter the competitive bidding process. “Simply put, if we could not acquire this business, we would have had to build it,” says Sameer Sathpathy, chief marketing officer.

Marico has already notched impressive gains in these categories. Its success mantra: Learning to do business in a new way for an audience that is more aspirational, even fickle.

Why personal care?
In 1962, when Harsh Mariwala joined the family business at Bombay Oil Industries, he had no clue that there would come a time when he would have to look outside its staple hair oil business for growth. Still, in the early 2000s, the company found itself in that position and ventured into the cooking oil business with Saffola, a brand built on the promise of lower cholesterol. Sales soared as health-consciousness rose in urban India. Between 2000 and 2010, the company’s market capitalisation increased more than 10-fold, from Rs 800 crore to Rs 13,000 crore.

But by the end of the decade, Marico found itself in the search for more options in areas that could be considered ‘businesses of the future’—that is, those that take advantage of India’s young demographic. Breakfast cereals, as mentioned earlier, presented one such opportunity, while personal care emerged as another. “We needed a portfolio that was in line with future trends and left a lot of headroom for growth,” said Mariwala.

Personal care brands had been benefitting from the surge in personal grooming in India. They boasted growth rates of 20-25 percent, far higher than the seven percent seen in Marico’s core categories. This was identified as an attractive category.

The choice was build versus buy. Setting up the business from scratch would have taken three to five years and come at significant cost. A national advertising campaign would set the company back by Rs 25-30 crore. Add to that, the cost of strengthening distribution. Contrast this to an easier, stable entry that the Paras brands would provide. It was a no-brainer.

But the acquisition had its own set of challenges. Reckitt Benckiser had stopped investing in the brands, given its disinterest in retaining them. Consequently, they had lost market share as well as recall. While Marico’s primary task was to fuel growth, the other big job was integrating a smaller but more strategic business into the company. Integration issues have been known to adversely affect brands. It knew it would have to tread carefully.

Keeping it Separate
To begin with, Marico could not allow Paras’ brands to be subsumed by the larger company. A well-established consumer goods player, it had corporate systems and processes in place. Further, these were tailored to the hair and cooking oil categories, “boringly stable businesses” as Gupta describes them. The youth-oriented consumer businesses did not have room for stodgy practices.

The solution: House the new team separately. Much like Axe employees who are seated in an office outside the Unilever headquarters in London, Marico chose to keep the new group in New Delhi away from its head office in Santa Cruz, Mumbai. This physical distance allows the team to function with the same agility as it did when it was under Paras.

The personal care space is characterised by what analysts call non-stop innovation. For instance, it took Marico just six months to change the packaging for Zatak deodorants.

The advertising, too, needed a fresh approach. The older campaigns appealed to the youth in a somewhat sedate manner. The newer ones have a breezier feel, more relatable for an under-35 audience. “This is a business characterised by high advertising spends and this is the only way one can stay ahead of the game,” says Abhneesh Roy, an analyst with Edelweiss.

No easy road
This is largely because this category is beset with competitive intensity. For example, if you had stepped into Big Bazaar at Mumbai’s Phoenix Mills recently, you would have seen a counter stacked with deodorants with discount signs on them. On an average, they were being sold at 25-30 percent less than the sticker price. A fair number of those brands had been imported. Company representatives vied for customer attention as they offered new fragrances for testing.

As such, the personal care category demands constant advertising support across print, radio and television as well as social media marketing. Given the high margins the brands promised to deliver, Marico has decided to spare no expenses and to good effect. The company declined to specify how much it spends on advertising for the three brands. Under Reckitt Benckiser, Zatak and Set Wet had suffered due to a loss in advertising support. Both these brands now have a combined 5 percent market share, a throwback to their status in the Paras days. In the three quarters that Marico has worked with the brands, Zatak, Set Wet and Livon have grown by 26, 25 and 21 percent, respectively.
The growth hasn’t been painless. Distribution, for instance, has proved to be a challenge. With the old business, the company had built its strengths in servicing kiraana stores and modern trade. It now has to deal with cosmetics and chemist outlets as well.

Further, with consumers demanding regular replenishment of specific variants of a brand, the products have to be sold in units as opposed to being sold in boxes like Parachute and Saffola are. This adds to the complexity of managing the supply chain.

Then there is the demanding consumer base that not only wants deodorants and hair gels in different pack sizes, but also needs fragrances to be frequently refreshed. “One of the main challenges is to understand what fragrances are working in the market and then producing them quickly,” says Gupta.

Most importantly, housing a Rs 150-crore business, albeit a fast-growing one, is a costly affair.

Gupta is clear that it will take the company two more years to establish a winning position in the business. For now, he says, they are focussed on ensuring their brands’ visibility in the market.

Investors, meanwhile, have adopted a wait-and-watch attitude.

At Rs 209 a share as of July 12, Marico’s stock has barely moved in the last six months. This, however, can be attributed to growth and margin pressures in its core oils business. Market watchers say this stagnation does not reflect the long-term potential of the company. After all, the stock has gone up nearly 10 times in the last nine years. Further, they say the company’s initial approach in the personal care business shows Marico is on the right path towards building a long-term sustainable presence in this category.

Marico Believes In Profit After Trust

by Saumya Roy | Oct 13, 2010

Marico is taking decisions against the typical instinct of a successful business: Give up today to gain tomorrow

Harsh Mariwala is not your conventional businessman. In an age when entrepreneurs are expected to focus only on maximising profits, Mariwala belongs to a small but growing club of businessmen who try and adopt a holistic attitude to the way their companies operate.

As the man at the wheel of the $600-million consumer products firm Marico, Mariwala tries to ensure that all stakeholders in the business — from employees to suppliers to dealers to consumers — benefit from company operations. That means no squeezing of suppliers or treating consumers as second class citizens or exploiting employees. He believes that running a company this way is very beneficial in the long run. “We have a belief that there is a certain interconnectedness among [stakeholders],” says the tall and wiry Mariwala. “There is ample evidence we are gathering from our internal experience that whenever we have acted in the interest of all [stakeholders] it has paid us back.”

Mariwala’s ideology can be best illustrated by the relationship between Marico and the farmers from whom it sources safflower for its cooking oil brand Saffola.

Marico is India’s largest buyer of safflower and has 32,000 farmers under contract. But when open market prices soar, many farmers turn opportunistic and renege on those contracts. For instance, over two-thirds of the contracted safflower was sold in the open market this year instead of to the company.

Marico says it is OK with this because its main objective has been to ensure an increase in safflower production. When only a third of the contracted safflower turned up last year, Marico did have the option to enforce the contract and ask for all. But Mariwala chose against it because that would have soured the relationship between the company and the farmers.

He decided to earn the farmers’ loyalty that would ensure long-term supply. He offered to pay the farmers the market rates  whenever the prices rose and a minimum guaranteed price if they fell. The strategy worked. The proportion of contracted safflower sold to Marico increased to 45 percent this year.

While it may appear as if Marico capitulated in a seller’s market, the truth is that Mariwala is a firm believer in Conscious Capitalism. He simply couldn’t deny the farmers the benefit of market forces.

In January 2009, Mariwala commissioned brand consultants Alok Nanda & Co. to conduct an in-house exercise to find a purpose for Marico — one that would drive the company and fire the imagination of its stakeholders. Alok Nanda, the consultancy’s boss, found that the employees wanted the company to go beyond business and do something with a social, environmental and health impact.

It was around this time that he read the book Firms of Endearment by Raj Sisodia. He asked Jagdish Seth, the Emory University professor and an advocate of Conscious Capitalism to conduct a workshop on the movement in Marico.

Called ‘Purpose’, the mission had multiple objectives. It included a range of programmes for employees ranging from anonymous counselling for mental health to financial planning and diet plans.

Marico also began working closely with suppliers. The company has an internal Web system that tracks all their contract farmers for safflowers. Marico texts farmers information on when to sow, how much and what kind of fertiliser to use based on weather conditions, soil quality and other such inputs.

Marico is working with the Coconut Development Board and the Kerala government to bring mechanisation to the dangerous and long drawn process that stretches from plucking coconuts to drying and extracting oil for Parachute (Parachute is the No. 1 hair oil brand in India).

Jojo Thomas, who has a coconut farm with 200 trees in North Kerala’s Mallapuram district, says his income has doubled because of the improved farm practices Marico has introduced. He harvests 40,000 coconuts a year now from around 16,000 coconuts earlier.

But won’t taking care of everybody’s need mean Marico will need to adopt a soft approach to business? “We are not running a charitable organisation. Let’s be clear,” says Mariwala. “In terms of work performance you have to be very demanding with your supplier associates. But at the same time you have to play a catalytic role in developing your own suppliers.”

The biggest challenge will be to sustain the Purpose agenda throughout the company over the longer term. Mariwala says he now wants Conscious Capitalism to grow roots in the company so that employees can make it their own rather than treat it as something pushed down by management.

“Senior management have to be aligned completely because if they pass the message down the line that what we are doing does not make sense then that is what they will make of it,’ he says. Alok Nanda created communication that would amplify employees’ experiences and successes with purpose. He designed it to be a dialogue within the company.

“Purpose has to be lived,” Nanda says. ”We didn’t have to sell it. We just had to articulate it because there was a part vision and we held a mirror to the company.”

The workoutaholic

Harsh Mariwala, Marico Chairman


Marico Chairman Harsh Mariwala doesn’t just make money out of selling wellness—he also walks the talk. Between pull-downs and shoulder presses, he tells TV Mahalingam why fitness is a way of life for him

Harsh Mariwala is as comfortable talking about leg extensions and bench presses as he is about brand extensions and business. The 57-year-old Marico Chairman is almost as old as the Governor of California, and though he may not have Arnold Schwarzenegger’s bulk, he would certainly impress the Terminator with his fitness level and rigorous exercise regimen.

The tall and lanky Mariwala works out almost every day and claims only illness can stop him from exercising. He spends three days a week on weight training, two days on cardio (walking, treadmill, cycling) and another two on golf. “A good physical workout takes your mind away from work and ensures that you sleep well. Otherwise, your mind is always working,” says Mariwala, who spends about 12 hours at work every day.

Pranav, Manager at Sykz Total Fitness Gym in Mumbai, where Mariwala works out, vouches for the Marico Chairman’s dedication: “He is very, very fit for his age. He can leg press and leg curl about 100 pounds, which is pretty good for a 57-year-old. He can do a lateral pull-down (for the back) for about 80 pounds.”

As someone who heads a group that addresses the wellness segment, Mariwala

“Workouts take the mind away from work and ensure good sleep. Or else, the mind is always working”

firmly believes in practising what his clinics preach. “Being overweight is the cause of most health problems, whether it’s heart ailments, diabetes, arthritis, or any lifestyle health disease. Weight management is a significant part of handling them,” he says. And, the Marico Chairman should know—recently, one of his own clinics found him to be seven kilos overweight. Mariwala immediately modified his diet, and burnt off five-and-a-half kilos. He’s working on the balance.

On the one hand, the disciplined manner in which Mariwala works out has left him with a fine body. On the other, it has helped him build a group whose revenues stood at Rs 1,900 crore in 2007-08. And that’s no ordinary achievement, considering that he started from scratch. He moved out of his family-run business, Bombay Oils, in the early-1990s to start Marico. Less than a decade ago, Marico had just two leading brands, Parachute and Saffola, with a largely domestic focus. Mariwala changed all that. He created the organised wellness segment in the country almost single-handedly through the Kaya Skin and Kaya Life brands. Along the way, he took on the might of Hindustan Unilever, Proctor & Gamble, and a host of well-entrenched regional players.

Dedicated athlete

Mariwala’s passion for staying fit is no fad. It’s something he’s been doing for nearly two decades. Most people struggle to find time to exercise. Yet, this man, who manages a multi-million-dollar FMCG corporation, always finds time, no matter where he is or how busy he is. If he’s travelling, his secretary slips in a copy of his workout schedule in his papers. Inquiries are made to ensure that the hotel he stays in has a gym or a pool. “Worst case, I ensure that the hotel is close to some place where I can take a walk. So, when in Delhi, I stay in hotels close to the Lodhi Gardens,” says Mariwala.

But wouldn’t a brisk walk suffice? No way, he says, explaining: “As you grow older, your muscles start sagging. You need to strengthen them. Earlier, I would just walk on weekdays and play golf on weekends. Then, I realised I wouldn’t be able to play golf, let alone play it well, if I didn’t tone up.” That led him into the gym.

No pain, no gain

However, it’s not been easy. Mariwala says that his exercise regimen has evolved

according to the demands or limitations of his body. He used to be an avid squash player, but gave up the sport when his knees began to hurt. He used to swim regularly until frequent colds kept him away from the pool. But he’s never allowed those hiccups to get between him and the gym.

So, does he expect his employees to also spend time exercising? After all, Marico’s all about wellness. Not really, says he. “For me, this is something personal. Working out makes me feel great and it helps me to beat stress. However, I’m no evangelist. I do not expect others, employees or friends, to follow any fitness programme.”

He, though, is very particular. Mariwala even has a contingency plan in case he can’t make it to his gym because of a traffic jam. He has zeroed in on walking locations along Mumbai’s Western seaboard: Marine Drive, Worli Sea Face, Carter Road and Juhu. For regulars at these spots, the sight of Mariwala hooked on to an iPod and walking at a fast clip is a normal feature. And no Eye of the Tigeror any such pump-ups while he’s at it. He prefers Hindustani classical music instead.

Like any fitness freak, he doesn’t like taking even a day off from his routine. The man has even worked out in international airports. Even holidays are not meant for chewing fat and indulging in sloth. Mariwala’s last one was in Coonoor, where the mornings were spent playing golf and the evenings on long walks across lush meadows. On one holiday, he trekked to the Pindari Glacier. Another time, he and his friends went to Gomukh in the Himalayan foothills. From there, they rafted back on the Ganges. Clearly, this is not a man who would see eye to eye with Mark Twain, who once famously declared: “I am pushing 60. That’s enough exercise for me.”

Marico to demerge, list Kaya business

PTI    New Delhi   Last Updated: January 8, 2013  | 00:06 IST

Harsh Mariwala will continue to be the Chairman and Managing Director of both Marico Ltd and Marico Kaya Enterprises Ltd.

FMCG firm Marico on Monday said it will demerge its Kaya skin care business into a separate entity and list it independently on bourses, as part of the company’s business restructuring process.

The company’s board, at its meeting held on Monday, approved restructuring of Marico’s businesses, corporate entities and organisation, effective April 1, 2013.

As part of the restructuring process, the company’s Consumer Product Business (CPB) and International Business Group (IBG) will now form a unified FMCG business while Kaya will be re-defined as a separate business, Marico said in a statement.

“The company also strongly believes that for the next phase of its value creation journey, the Kaya business should be run in an entrepreneurial manner independently from the FMCG business of Marico,” it added.

The restructuring will bring sharper focus across both the consumer goods and cosmetic services businesses of the company, it said.

The company’s board has proposed to create two separate companies through partitioning of the current Marico Ltd, into an FMCG business company which is Marico Ltd (already in existence) and a Kaya business company which will be Marico Kaya Enterprises Ltd (MaKE, to be formed), it said.

As a consideration, the shareholders of Marico Ltd as on the record date shall be issued one share of MaKE with a face value of Rs 10 each to be issued at a premium of Rs 200 per share for every 50 shares of Marico with a face value of Re 1 each, it added.

“MaKE will also be listed on the BSE and the NSE, just like Marico Ltd…Listing may take about 60-75 days from the date of receipt of approval of the Scheme of Arrangement from the Court,” it added.

MaKE will have its own separate board of directors, distinct from Marico’s board, the company said.

Harsh Mariwal a will continue to be the Chairman and Managing Director of both Marico Ltd and Marico Kaya Enterprises Ltd,” it added.

The company said there is unlikely to be any adverse impact on the income statement of Marico or MaKE pursuant to the Scheme of Arrangement except for the costs of executing the proposed Scheme.

The company said Saugata Gupta, who currently heads Consumer Products Business will lead the overall FMCG Business, as Chief Executive Officer- Marico and will continue to report to Harsh Mariwala.

“Vijay Subramaniam, who currently heads the International FMCG business, will take over as Chief Executive Officer- Kaya, effective April 1, 2013,” it added.

The company said Kaya Chief Executive Officer Ajay Pahwa has decided to leave the organisation, to pursue an entrepreneurial venture backed by private equity investment.

The meaning in Marico’s methods



Business LineSaugata Gupta, CEO, Marico. – Photo: Paul Noronha

Saugata Gupta, CEO (Consumer Products), on buying and shedding brands, core competence and consumer insight.

Like many of its peers in the consumer goods industry, Marico, maker of blockbuster brands such as Saffola and Parachute, has been on an acquisition binge abroad, taking over brands in South Africa and South-East Asia. In this interview at the Marico office in Bandra, Mumbai, Saugata Gupta, CEO, Consumer Products, Marico Ltd, discussed the rationale behind these acquisitions, Marico’s growth strategy, commodity price fluctuations and the impact on its brands, diversifications and much else. Excerpts:

Marico has seen a spate of acquisitions abroad. Are you looking at bringing those brands into the country?

There’s a huge threshold level of investment in creating a brand. To an Indian consumer, whatever it’s called doesn’t matter, it’s new anyway. What it has done is given us access to certain product categories (in male grooming) and should we decide to participate in the category, it gives us access to technology and shared sourcing. Common distribution, media footprint and consumers determine a brand launch. But, I don’t think we have acquired scale right now.

Is this a strategy that other Indian FMCG firms are pursuing? Acquiring companies in Africa and South-East Asia? Does that insulate them from Indian competitive pressures?

All of us are looking at multiple pillars of growth. If you look at Africa, there are lots of similarities. Category penetration is low, the scope for potential growth, also, it’s a complex market; one of the competencies of Indian managers is to work in a slightly chaotic environment. The distribution system is still not organised. Also, the market is still not competitive. These are the factors driving acquisitions. It’s still not a focus market for many MNCs, but a focus market for Indian companies. While complexity is there, the relative competitive intensity being low, we’re investing ahead of the curve.

You have bought brands in categories in which you are not present in India, right?

Essentially it’s in nourishment and styling. In the case of Vietnam, there are shampoos and gels; in South Africa, it’s a lot of ethnic hair care products. Here we have a wider range and more sophisticated products, so there is obviously an opportunity.

If you do bring in products, would they be under the Parachute brand, where you already have male grooming products, or a new brand?

That will depend on the size of the opportunity. For me, it makes strategic sense if the existing power brands are stretched to the extent possible.

What about taking your brands to those markets?

Parachute is already in the Middle East market. Again, it’s the same thing, do you want to use an existing brand name and stretch it? For example, we have Code 10 in the South-East Asian markets, which we bought from Colgate, it is available in surrounding markets apart from Malaysia. I think what is interesting is tech formats and category knowledge that will help, not necessarily the brand transfer. Our approach is essentially market-forward and not necessarily category-forward. But, having said that we have a method by which we focus on certain categories. While we have been defining beauty and wellness, we are ensuring that we are getting critical mass in that.

What about the other thrust area for you, functional foods? You launched attaadditives earlier?

Yes, we launched oats, which is doing well. Atta additives is small, but we are serious about foods and are looking at other stuff in health foods. You will see some more this year.

All your forays in food will be under the Saffola franchise?

Health food will be under Saffola. I don’t see Saffola getting into indulgence, but we will get Saffola into areas where taste and family values are involved.

You said you would look at products that are in the ready-to-cook area, not so much ready-to-eat?

I was talking in general about the market, not particularly about Marico. In India, I don’t see RTE products having a big market, because there is still a concept of ‘fresh’, there’s labour available and the housewife would still like to prepare the food. Now, because of time and convenience, what she doesn’t like is negative labour, it could be cutting vegetables, preparing a masala, there’s a huge market for intermediate foods. For example, the breakfast category has grown on the health and convenience plank. There’s an increase in double-income families and people are time-poor in the morning. You can have help cook a meal later in the day, but you won’t have help cooking breakfast. Talking generically, that’s why the breakfast category has grown.

Has Marico’s attempt been to reduce the dependence on the commodity cycle? You sold Sweekar, but Parachute too remains prone to these cycles, doesn’t it?

There is a difference between Parachute and Sweekar. Parachute is a strong brand and can command a premium, there would be some fluctuations in margins but our ability to pass on to the consumer is reasonably high. What is most critical is to provide certain values to consumers, long-term benefits, and not look at short-term profits. If there is commodity inflation, we need not pass on everything to the consumer. Parachute is a far stronger brand. Sweekar was different — it was a combination of two things: One, we didn’t see a huge growth opportunity. It was a drag on our bottomline and growth. In edible oil there are only two business models: extremely high levels of volume and economies of scale, like what Fortune has achieved. But, the other is the Saffola model, which is a strong brand and has the ability to command a premium. So you have to continuously innovate. If you’re in the middle, you are stuck, you are neither a volume player or a premium one. Sweekar, we were looking out for buyers for a long time. At the end of the day, we were ensuring that in the last 3-4 years, we were maintaining the brand value, not destroying it and it contributed 6-7 per cent of our revenues. Obviously, there is a right time when we got out of it. At no point was there desperation to sell.

You are not showing an aversion to buying or selling brands — you’ve acquired many but also sold brands such as Sil and Sweekar?

The reason is that Sil didn’t give us strategic fit at that point of time.

But, weren’t processed foods the way to go? And Sil as a brand had gained some traction?

We have said that we will be in the beauty and wellness space. Apart from that, Sil was a marginal player. If you don’t have a certain scale or brand investments, you have to make choices. One of the things we did in the last two years, which is beginning to help us, is focus. We were chasing too many small things and too many initiatives across the organisation. One of the things we decided was to have a ‘stop doing’ list! Even the brands which we are supporting or putting in our investments — we had a few big bets, and are persisting with it. Opening up multiple channels, obviously the escape button is up. That’s one key strategic shift we’ve done and we’ve seen results and will continue to do so.

The mistakes people make, if you look at a growing market such as India, you will come up with the same list of categories which are attractive. What is critical for any organisation is the ability to win in that category and that happens when you have shared customers and supply chain. People don’t look at competencies. One of the reasons we withdrew this brand called Sparsh … the product was wonderful but we didn’t have a right to win because for its distribution, the key influencers were paediatricians and mothers, but our target group did not have shared consumers. The mother wants a safe product, she does not want to experiment.

For example, I have about 25 lakh Saffola households. Now, if I can cross-sell even to 10 per cent of this, I have a Rs 250-crore business. We have power brands and a set of loyal customers. The extent of extensions possible, that we need to see.

Yes, we have to reduce our dependence on commodities but that doesn’t mean I can get into every category which looks attractive. We need the entire competencies across. Many companies fail because they think they have been successful in one category, they can move on to others without the real ability to win.

So, a lot to be said for C.K. Prahalad and his core competency concept?

A lot of companies falter in their growth; any sector which has heady growth, process and capability follows that growth. But in a sector which is reasonably stable, process and ability should lead growth, otherwise, growth falters because of a lack of processes. So, they are critical. For us, the India business is Rs 2,000 crore, from 2003, our journey has been upward from Rs 500 crore, we had to have the next level of organisational capability to drive upwards. We believe a strong foundation is required for the next level of growth. Culturally, we prefer doing and talking! That’s why we say we are boringly consistent, but then we are growing at 20 per CAGR. The exciting news is less, but that’s okay, as long as the pace of growth is good. The focus is something we believe in.

What about growth in the hair oil category? Is it set for a slowdown as consumers cut back on the practice of oiling their hair?

If you look at the value-added category of hair oil, in certain top-end markets there is a reduction in frequency, but if you really look at it, as a category it has grown the same way / rate as any other personal care category. People have an inherent belief in the nourishment category. A lot of usage has moved from post- to pre-wash. This is something which we are cognisant of and therefore our endeavour is to improve benefits. Specifically, for hair fall, we’ve introduced a product that is doing well in the South, Parachute Advansed for hairfall; developed along with the Arya Vaidya Sala.

(This article was published on July 13, 2011)

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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