a diversified Indian company with business interests ranging from chemicals, processed foods and beverages, animal feeds, poultry, rural retailing, pest management services, property development, agri-products to branded tea, confectionery and household insecticides among others, today announced its audited financial results for the financial year ended 31st March, 2008.
Commenting on the results, Mr. Adi Godrej, Chairman, Godrej Industries Limited, said, Godrej Industries has delivered consistent results for the financial year under review. Its Chemicals business bounced back strongly as a result of efficient buying and improved margins with a growing focus on exports.
Each of our subsidiaries and associates have performed in line with expectations and maintained their vibrancy through brand innovation and activities that are yielding positive results. I am certain that our investments across each of our subsidiaries and associates will mean a brighter future for Godrej Industries and its shareholders.
Godrej marketing and branding strategy Investing in a Brighter Future
Godrej group has charted a new marketing and branding strategy that aims at revitalising the Godrej master brand. The group has unveiled its new corporate identity recently. The group intends to invest significantly in its Master Brand as part of a systematic plan for creating a strong Godrej brand franchise through strategies for product and brand development, retail channel strategy, communication and talent management. The initial phase of the initiative will build the Godrej Master Brand in tandem with the four businesses of personal grooming, furniture, property and aerospace.
Business and operational perspective
The Chemicals division reported a strong revenue growth of 21% for FY 2007-08 at Rs.692 crore compared to Rs.572 crore in the previous fiscal. Profit before Interest and Tax grew by a 1267% to Rs.82 crore versus Rs.6 crore in FY 2006-07, largely due to efficient and effective raw material procurement and improved margins. Exports have also contributed to the growth by crossing the 300 crore mark in terms of revenue and now comprise 43% of the divisions turnover, with exports to over 60 countries.
The Chemicals division was recognized as the Outstanding Exporter of the Year for the second consecutive time in the chemicals category of the International Trade Award 2008 awarded by CNBC-TV18 and DHL.
During the year, the division also accomplished forward integration into high-value added surfactants and derived significant operational efficiencies from its improvement initiative Parivartan at its Valia factory.
GIL sold its medical diagnostics division as a going concern as at the end of December 31, 2007 to RFCL, one of the leading life sciences and lab solutions company, to ensure its continued growth.
Overview of Major Subsidiaries and Associate Companies
Godrej Agrovet Limited (GAVL)
GAVL is in the business of animal feeds, agri inputs, poultry, oil palm and rural retailing. GAVL recorded revenue growth of 19% in FY 2007-08.
Godrej Agrovet launched 26 new rural retailing stores under its Aadhaar banner to take its total number of stores to 65 outlets.
During the course of the fiscal, the Aadhaar rural retail business implemented a number of marketing and promotion initiatives such as:
* Launching the Chak De Jeet Le promo campaign in October with strategic partners like Tata Motors, TVS and Nokia * Opening the first Petro Format Aadhaar Express Store in Gujarat * Creating the second Petro Format Aadhaar Express outlet with BPCL in Kashti (Maharashtra) * Adding branded Shop-in-shops (e.g. Grasim, Welspun, Shemaroo, Nilkamal) * Forging strategic tie-ups with Reliance General Insurance Co. Ltd. for promoting insurance products in Aadhaar stores
The Natures Basket chain of stores continues to redefine high-end, urban retailing with the addition of new world-food categories such as imported wine, cheese, cold-cuts and processed food. Yummiez, range of ready to eat veg and non-veg snacks, opened 18 new kiosks in shopping malls and multiplexes to strengthen its presence amongst its key consumer segments.
GAVL entered into a Joint Venture with Future Ventures and sold a 70% stake in Aadhaar Retailing Limited to them. The joint venture will effectively combine Future Ventures retailing expertise with Godrej Agrovets experience in rural marketing.
GAVL acquired 51% in Cauvery Palm Oil Limited in March, 2008 to give it access to palm oil plantations in Tamil Nadu and strengthen its palm oil business.
Godrej Properties Limited
Godrej Properties is in the process of filing a Draft Red Herring Prospectus with SEBI to take forward its plan for an IPO in the near future. In view of regulatory restrictions, no business / financial performance updates can be provided at this time.
Godrej Global Solutions Limited (GGSL)
Godrej Industries inked a share sale agreement in May 2008 to sell its stake in GGSL to Tricom Limited. This move will help the business grow faster and service clients more efficiently by leveraging the synergies between the two companies common areas of business. GGSL operates in the healthcare, finance and accounts domain.
Godrej Consumer Products Limited (GCPL)
As Indias second largest toilet soap manufacturer, the company has achieved a revenue growth of 12% for the fourth quarter of 2007-08 and a revenue growth of 16% in FY 2007-08. PAT grew by 33% in the last quarter of the fiscal and by 19% in FY 2007-08.
GCPL extended its presence in South Africa through the acquisition of Kinky, a marketer of hair, hair braids, hair pieces, wigs, wefted pieces and other hair products like styling gels, hair sprays and oil free shampoos. The company also acquired Godrej Global Mideast FZE a 100% subsidiary of Godrej Industries Ltd.
During its most recent fiscal, GCPL invested significantly in its brands and maintained a focus on launching innovative new products into the market. For instance, the company:
Relaunched brand Cinthol with the 24 hour confidence proposition, new graphics and a new range of soaps, talcs and deodorants
Launched Renew Powder Hair Colours - a new offering under Renew brand.
Relaunched Powder Hair Dye as Godrej Expert Hair Dye
Launched new variant - Papaya and Lotus under the Godrej No.1 Brand.
Godrej SCA Hygiene launched Libero baby diapers, Tena incontinence diapers and Libresse Sanitary Napkins across India
Godrej SCA Hygiene relaunched Snuggy Dry Baby Diapers in Kerala and Tamil Nadu with a unique absorption formula and a cloth like feel.
GCPL also continues to be a leader in the other categories it is present in. Godrej Ezee for instance, is the only premium brand to be awarded SuperBrand status and Fairglow continues to be the largest selling fairness soap in India
Godrej Sara Lee Limited (GSLL)
GSLL spans a wide variety of categories with leading brands such as Good Knight, Jet, Ambipur, HIT, Brylcreem, Kiwi and Kleen.
In the last fiscal, GSLL launched the Ambipur aromatherapy range of car perfumes and acquired the household and body care business of Sara Lee in India and Sri Lanka.
GSLL also unveiled a new identity for Good Knight with advanced packaging and maintains its leadership in the household insecticides category.
During FY 2007-08, GSLL witnessed a revenue growth of 26% and a PAT growth of 34% on consolidated basis. Its profitability has been aided by successful efforts to re-engineer costs and improve realizations.
Godrej Hershey Limited (GHL) (Formerly known as Godrej Hershey Foods & Beverages Limited)
GHL markets juices and fruit drinks under brands Xs and Jumpin; soyamilk based drink under the Sofit brand; and edible oil brands like Cooklite, and packaged tea under the brand name Godrej Tea and confectionery under the Nutrine portfolio. The Nutrines portfolio includes strong sub-brands like MahaLacto, Maha MahaLacto, Koko Naka, Milk Eclairs, Honey Fab, Aam Ras, Aasay, SuperStar and Gulkand.
The company forayed into the Milk Food Drinks (MFD) category by rolling out the first made in India Hershey innovation, Hersheys Nourishing Milkmix in Tamil Nadu. Hersheys Milkmix is a fortified chocolate syrup in easy-to-squeeze bottles that makes great tasting hot chocolate mix.
The companys new initiatives included a ramp up of sales for the new candy Super Maha Lacto through a concerted media campaign and distribution efforts. GHL also launched a new variant of Nutrine clairs and special packs for candy and beverages segment during the festive season.
The sales of other Godrej Hershey brands like Sofit and Xs grew by 51% and 23% respectively