Thursday, April 12, 2012

Marico

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Income Statement


As on( Months ) 1-Mar-0(1) 1-Mar-0(1) 1-Mar-01(1)


Profit / Loss A/C Rs mn %OI Rs mn %OI Rs mn %OI


Net Sales 77.76 8.51 6658.5 .4 651.87 .46


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Operating Income (OI) 7408.7 100.00 66.4 100.00 6548.0 100.00


OPBDIT 817.75 11.04 747.8 11.18 64.88 .54


OPBDT 7. 10.7 701.81 10.4 580.00 8.86


OPBT 58.0 7.86 560.4 8.7 41.1 7.50


Non-Operating Income 8. 0.11 5.50 0.08 8.00 0.1


Extraordinary/Prior Period -0.00 -0.00 -8.8 -0.4 0.00 0.00


Tax 5.50 0.80 4.50 0.65 4.00 0.66


Profit after tax(PAT) 50.81 7.17 4.5 7.7 456.1 6.7


Cash Profit 748.80 10.11 64.81 10.8 545.01 8.


Dividend-Equity 17.75 1.86 0.00 .0 145.00 .1


Balance Sheet


As on 1-Mar-0 1-Mar-0 1-Mar-01


Assets Rs mn %BT Rs mn %BT Rs mn %BT


Gross Block 144.7 47.5 1.46 5.41 65.88 46.1


Net Block 84.70 .71 84.70 5.81 66.08 .00


Capital WIP 11.7 4. 54.6 .4 80.5 .85


Investments 64.01 .5 8.6 0.7 8.6 0.41


Inventory 888.64 1. 81.0 4.81 67.55 .6


Receivables 5.5 8.8 1.64 1. 4.01 0.


Other Current Assets 671.45 .64 6.5 14. 1.06 10.14


Balance Sheet Total(BT) 840.10 100.00 5.4 100.00 00. 100.00


Liabilities Rs mn %BT Rs mn %BT Rs mn %BT


Equity Share Capital 0.00 10.1 145.00 6.16 145.00 6.


Reserves 110.85 46.16 105.77 55.48 104.87 4.


Total Debt .6 1.85 50.47 .14 6.8 1.74


Creditors and Acceptances 60.65 1.5 58.4 5.04 66.5 .0


Other current liab/prov. 4.4 8.5 6.01 11.18 16.0 .8


Balance Sheet Total(BT) 840.10 100.00 5.4 100.00 00. 100.00


Latest Quarterly/Halfyearly Detailed Quarterly


As On(Months) 0-Jun-00() 0-Jun-00() % Change


Sales of Products/Services 01.60 1755.70 15.71


Other Income 5.70 5.00 14.00


Total Income 07.0 1760.70 15.71


Total Expenses 180.70 1560.10 17.5


Stock Adjustments 0.00 0.00 --


OPBDIT 06.60 00.6 .


interest 4.0 4.60 -6.5


Depreciation 6.80 6.0 -6.17


Extraordinary Items 0.00 0.00 --


Prior Period Adjustments 0.00 0.00 --


Provision for Tax 7.0 .70 -8.08


After Tax Profit 148.0 10.00 14.00


Equity Capital 0.00 145.00 100.00


Reserves 0.00 0.00 --


Notes to Accounts Click here Click here


Ratio Analysis


As on 1-Mar-0 1-Mar-0 1-Mar-01


OPBIT/Prod.cap.empl.(%) 7.6 4.4 47.8


PBIT/Cap. Employed (%) .48 40.0 47.54


PAT/Networth (%) .16 4.00 8.8


Tax/PBT (%) 10.08 8.10 8.61


Total Debt/Networth (x) 0.5 0.0 0.0


Long Term Debt/Networth (x) 0.00 0.0 0.0


PBDIT/Finance Charges (x) 44.61 15.7 14.10


Current Ratio (x) .14 1.70 1.54


RM Inventory (days consumption) 5. 48.8 46.07


FG inventory (days cost of sales) 15.5 1.15 14.88


Receivables (days gross sales) 1.5 15. .65


Creditors (days cost of sales) .4 6.18 41.6


Op. curr. assets (days OI) 77.00 7.00 74.00


Share Statistics


As on 1-Mar-0 1-Mar-0 1-Mar-01


EPS (Rs.) 18.0 4.0 1.47


CFPS (Rs.) 5.8 47. 7.5


Book Value (Rs.) 55.0 100.05 81.


DPS (Rs.) 4.75 14.00 10.00





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· The Hindu · Business Line · The Sportstar · Frontline · The Hindu eBooks Investment World - StocksMarkets - RecommendationMarico Industries Hold Aarati Krishnan A COMBINATION of events has made the March 00 quarter a taxing period for Marico Industries. After managing a 17 per cent growth in its net profits and a 1 per cent growth in net sales in the first nine months of 00-0, Maricos growth numbers have slowed appreciably in the final quarter of 00-0, to a 5.6 per cent growth in sales. Net profits for the quarter fell from Rs 15.4 crore to Rs 15.1 crore. But this is not a bad showing from Marico, considering a couple of points. Net profits would have actually registered growth and not a decline, but for a sharp hike in Maricos advertising and promotional (A&P) expenses from Rs .7 crore to Rs 14.8 crore for the quarter. Though raw material costs continued to head upwards during the quarter, operating profit margins remained at previous years levels, excluding the A&P spend. Full year Low realisations The insipid last quarter has weighed on Maricos financials for the fiscal 00-0. For the full year, Marico posted a growth of 11. per cent in net sales to Rs 78. crore. Net profits for the year grew 7.7 per cent, from Rs 4. crore to Rs 5.1 crore. The double-digit sales growth, in a tough year, is explained by two factors. One, categories such as hair oils (0 per cent volume growth), exports (4 per cent growth) registered robust volume growth. Second, even in categories (such as refined sunflower and safflower oil), where volumes have actually shrunk, selling prices have moved up sharply on the back of firmer commodity prices. Gains in hair oils, losses in edible oils During the year, Marico managed to make market share gains in the coconut and hair oil businesses, with the help of existing brand extensions such as Parachute Jasmine and Shanti Amla, and new launches such as Mediker anti-lice oil. The prices of the key raw materials such as copra were up by 0-40 per cent in relation to last year. But a foray into value-added oils and price hikes appear to have helped Marico pass on these increases to consumers in the hair oils business without ceding market share. But the edible oil business has been a tougher proposition. As the prices of key inputs spiralled upwards, Marico has been forced to hike prices of its key brands. But, here, price-sensitive consumers have switched to cheaper substitutes. As a result, through 00-0, Maricos market share in the refined oil business, slid from 11.7 per cent to .5 per cent. The shortage of inputs for the safflower oil business further shrunk volumes. Going forward, prospects for the refined oil business could continue to be sedate, especially after the recent decision to impose excise duty on refined oil marketed in consumer packs. But for Marico, this could be compensated by a higher contribution from its recent product launches (Shanti Thanda Tel, Parachute Jasmine, Saffola Nutri-Blend and Saffola Tasty Blend) and its new business forays. In the recent times, Marico has added substantially to its portfolio of businesses by venturing into skin care clinics (Kaya Aesthetics), high-end cosmetics (Sundari Llc) and soya-based foods (Mealmaker). Indeed, product launches is one area where Marico has made steady progress. Revenue from new products rose from around 4 per cent of revenues in 001 to 17 per cent in 00. Giveaways In the three years to 001-0, Marico rewarded shareholders in a slowing market, by stepping up distributions. Dividends rose to Rs.14 per share in 001-0, but have fallen to Rs.4.75 per share in 00-0. The per share dividends appear to have declined mainly due to a 11 bonus on equity shares, and bonus preference shares in the ratio of 11 issued earlier in 00-0. Given the sedate near-term prospects, there appears to be scope for some downside in the stock price over the next one year. Investors can however use a 5-10 per cent decline from current levels to add the stock to their portfolio for the long term. The trades at a price earnings multiple of nine times its 00-0 earnings.





Business Profile


Marico Industries (MIL), a closely held company of the Mariwala family, commenced operations by taking over the consumer products division of Bombay Oil Industries Ltd in 10. Marico `s brand portfolio comprises Parachute, Saffola, Sweekar, Hair & care, Revive,Sil Jam, Oil of Malabar, Shanti and Mediker. Parachute, a leader in the coconut hair oil market with over 50 per cent market share, brings in 8% of the company`s revenues. Effective June 18, MIL receives a fee from Indo-Nissan based on sales of Top Ramen. In 18-, the company was re-organised into businesses as profit centers nature care (Parachute, Hair & Care and Revive), health care (Saffola, Sweekar, Top Ramen and Sil) and international business.


Recent Developments


Shareholders of Marico Industries Ltd today took on record the results of the Postal Ballot conducted by the company.


The resolutions on the following items were declared carried with the requisite majority


1. Amendments to objects clause of Memorandum of Association


. Amendments to Articles of Association


. Reorganisation of Reserves for adjusting written down value of intangible assets.


Marico Industries Ltd has fixed August 1, 00 as the record date for the purpose of issue of bonus shares and payment of first interim dividend. The company proposes to issue one bonus share for every one existing equity share held. Transactions in Marico shares, therefore, will be on cum-bonus basis up to August 1, 00 and ex-bonus basis from August 14, 00. Export contributed .78% to the total turnover during the FY 001-0. Nature care division contributed 55.6% to the total turnover, health care 7.% and balance from others. The share of new products (Parachute Jasmine, Shanti Amla, Saffola Kardi- Corn Blend and Saffola Olive Oil) in the total turnover went up to around 1% of total sales in FY 001-0 as against 6% in FY 000-01.


Marico Industries Ltd has fixed August 1, 00 as the record date for the purpose of issue of bonus shares and payment of first interim dividend. The company proposes to issue one bonus share for every one existing equity share held.


Transactions in Marico shares, therefore, will be on cum-bonus basis up to August 1, 00 and ex-bonus basis from August 14, 00.


Marico in figures


0 October 1


Address - Marico Industries Ltd., Rang Sharda, K.C.Marg, Bandra Reclamation, Bandra (West), Mumbai 400 050.


Unaudited figures


Particulars(figures in Rs crore) Quarter ended 0 June 1 Quarter ended 0 June 18 Year ended 1 March 1


Sales & services 15.06 10. 551.1


Other income 0.7 0. 1.86


Total revenue 15. 10.7 55.08


Total expenditure 16.46 8.17 500.14


Finance charges 0.4 0.75 .71


Gross profit after finance charges but before depreciation and taxation 8.51 10.80 4.


Depreciation 1.4 1.8 5.0


Profit before tax 7.0 .4 44.0


Provision for tax 0.8 1.41 6.5


Profit after tax 6.04 8.01 7.51


Paid up equity share capital 14.50 14.50 14.50


Reserves (there is no revaluation reserve) 106.4


Shareholding in Marico


Category Shares Held % of Total


I. Foreign holdingsII. Govt./govt.-sponsored financial institutionsIII. Bodies corporate (not covered under I & II)IV. Directors and their relativesV. Top 50 shareholders (not covered under I,II,III & IV)VI. Others TOTAL 75001650010888001168015117488586640014500000 15.41.147.518.068.105.76100


companies M


A | B | C | D | E | F | G | H | I | J | K | L | M


N | O | P | Q | R | S | T | U | V | W | X | Y | Z


Marico acquires Oil of MalabarK A Anantharam0 October 1Marico Industries Ltd. which already has a stranglehold on the branded coconut oil market, moved a step closer to increasing this grip when it entered into an understanding with West Coast India Ltd to acquire its brand ‘Oil of Malabar’. Oil of Malabar, a coconut oil brand, with an all India market share of . per cent, clocked a turnover of over Rs 1 crore for the year ended 1 March 1. It has a national presence and a significant franchise in south India with an 8 per cent market share. The brand has a reach of about 1.6 lakh outlets, of which about 1 lakh are in rural areas.The understanding with West Coast gives Marico rights to all associated business and commercial rights. ‘Oil of Malabar’ will continue to be distributed, on mutually acceptable terms and conditions, through West Coast’s sales and distribution network, which has a strong rural bias.This acquisition comes in the wake of a challenge posed to its leadership by multinational giant Hindustan Lever Ltd, which recently strengthened its presence in this category with its acquisition of the ‘Coco Care’ brand from Recon Oil Industries. While analysts believe that HLL is not likely to prove an immediate threat to Marico’s supremacy, thanks to the huge brand loyalty that its premier brand � Parachute � enjoys, the organisation and distribution muscle of HLL may just prove dangerous for Marico.Marico currently leads the branded coconut oil market with a share of over 50 per cent through its flagship brand ‘Parachute’. This acquisition helps Marico in further consolidating its clout in the coconut oil market.With the sale of these brands, West Coast intends to focus on its other businesses.Ambit Corporate Finance Pte Ltd. acted as advisor for the transaction.


Marico salt rides piggy-back on Saffola


S. Lakshmi Narasimhan


1 January 1


Marico Industries has extended its up-market Saffola brand -- well known in the refined oil segment -- to salt. Saffola salt was launched in November 18 and is priced at Rs.0 for a 1-kilo pack available in a re-usable jar. The product is being launched in select towns of Mumbai, Delhi, Chandigarh, Calcutta and Pune at an introductory price of Rs.0.


The companys pricing is interesting. Compared to this, the price of a 1-kilo plastic pack of Tata salt, the market leader, is Rs. 6. Hindustan Levers Annapurna salt is priced at Rs 6, and DCWs Captain Cook at Rs.7. Will this strategy pay off for Marico? Why should people pay Rs 0 a kilo for a simple thing like salt when other reputed companies are selling the commodity for just a third of that price?


Marico Industries Ltd chief executive officer (health care) Pranab Datta says that the company wants to capitalise on the brand popularity of Saffola oil as a health product and extend it to salt, which doctors advise patients suffering from hypertension or a heart ailment, to cut down.


Maricos reasoning is that since Saffola oil commands a premium of 10 to 15 per cent over other edible oil brands, the company should be able to pull off a similar feat with salt. The rest of the mark-up is supposed to cover the cost of the jar. The company wants to leverage the Saffola brand equity through brand extension to expand its product portfolio, just as it has done with hair oil.


In 17, the company extended its Parachute brand to the value-added hair oil market. In a years time, the product is estimated to have notched up a 10 per cent share in a highly competitive market dominated by heavyweights such as Dabur (Vatika) and Hindustan Lever (Clinic Plus), who command a share of 40 per cent each. Marico seems to have a similar game plan for its salt.


The 5-million tonne Indian salt industry is mainly an unorganised business, and branded salt accounts for only a fifth of the market. The branded salt segment, valued at Rs.500 crore, is growing at around 0 per cent annually. The market leader is Tata Salt, with a share of 0 per cent. Hindustan Levers Annapurna salt and DCWs Captain Cook account for around 15 per cent each.


Marico acquires key brands


Alok Agarwal


5 May 001


Mr Harsh Mariwala, the ebullient chairman and managing director of FMCG major, Marico Industries has finally silenced his critics. His company has completed the process of acquiring brands, which it began a couple of years back, by acquiring two key brands, Parachute and Saffola, from Bombay Oil Industries.


Company sources placed the market value of these two brands at anywhere between Rs. 400-600 crore, given the fact that the two together contribute anything between Rs 65 per cent to 70 per cent to sales. With this acquisition, for which the company has paid Rs 0 crore to Bombay Oil Industries, Marico is now the proud owner of all nine prominent brands and their extensions, which are used by it to sell its products. These are Parachute, Saffola, Sweekar, Hair & Care, Revive, Sil, Oil of Malabar, Mediker and Shanti Amala.


The company will now save Rs crore annually on royalty payments it was making to Bombay Oil, the original owner of the brands and the promoter of Marico Industries. Obviously, this was frowned upon by the analysts who felt that the company was losing value by not owning the brands. Good brands, over a period of time, become an integral part of the consumers’ lives and this goes a long way in adding to the brand equity of the product. Though intangible, this equity carries a lot of importance in any valuation process.


Stung by crititcism, the company decided to reverse the situation and began the process of acquiring all its main brands some years ago. This process has now been completed in fiscal 001.


Speaking to domain-b Mr B Ramakrishna, corporate finance manager Marico Industries Ltd. said, The situation was considered bad corporate governance, which has now been corrected.


Marico’s brands have, by and large, done well in fiscal 001 managing to hold on to their market share. The company continues to work hard on its brand building exercise through higher advertisement and sales promotion (ASP) spends. In fiscal 001 ASP to sales and services was 1.1 per cent as compared to .1 per cent in fiscal 000. Out of this one-third of spending was on new products/markets. The year saw a 14 per cent volume growth in branded coconut oil business (Parachute and Oil of Malabar) and 7 per cent volume growth in branded refined oil business (Saffola). Its other brand building efforts included few but focussed product launches, product relaunches, product campaigns and innovative packaging propositions with a view to provide greater value to consumers, informed company sources.


During the year the company entered the Rs 70 crore Amla market, with the launch of its ninth brand, Shanti Amla. The product has been launched in the traditional markets of UP, Punjab and Madhya Pradesh to begin with before being rolled out to other states.


Overall fiscal 001 was a good year for Marico, termed as recessionary for FMCG companies. Despite a 1.4 per cent rise in sales & service income at Rs 657. crore, net profit grew 7.71 per cent to Rs 45.6 crore. This was despite a stagnant fourth quarter, which saw the company reporting a 5.08 per cent growth in sales at Rs 178.66 crore and net profit rising by only 6.7 per cent at Rs 10.6 crore.


However the company points out that the growth in turnover value is marginal because of two reasons. One, retail prices of most Marico products were on an average lower than in the previous fiscal and two sales figures excluded those of Marico Bangladesh Ltd., a wholly owned subsidiary, unlike in the previous year. In the previous year sales effected in Bangladesh was recorded in Marico Industries Ltd right uptill December 1. According to the company if sales volumes for fiscal 001 are taken at fiscal 000 value and the Bangladesh turnover included, Marico turnover would show a growth of 15 per cent.


Marico Industries is planning to open a chain of skincare and spa saloons called Kaya Skin Clinic in the major metropolises of India.


These clinics will offer a wide range of effective skin treatment customised for Indian skin types in the ambience of a spa. The first Kaya Skin Clinic will open in Mumbai by the end of 00.


Says Marico Industries chairman and managing director Harsh Mariwala “The new venture is an extension based on our strengths in the personal care business. Kaya is an attempt on the part of the company to fill the existing gap in the beauty services business in India.”


Every Kaya Skin clinic will offer scientific US Food and Drug Administration-approved unisex dermatological procedures. The target audience for Kaya Skin Clinics would be men and women in the SEC A/B category. With this market segment in mind, Marico aims to exploit the potential of moving up the value chain in the personal care business.


The first Kaya skin clinic will open in Bandra, a posh suburb of Mumbai, and will next move to Delhi and to other parts of the country. Initially, Marico plans to take the ownership route and not the franchisee route for these clinics.


Company officials, while not revealing the amount of investment involved in the venture, say the company will evaluate and crystallise expansion plans based on the experience gathered through the first clinic.


Marico manufactures and markets brands such as Parachute coconut oil, Hair & Care, Shanti Amla, Saffola and Sweekar edible oils, Revive Instant starch and Sil. Marico’s latest experiment with skincare saloons may have been inspired by Hindustan Lever’s (HLL) activities in beauty salons.


HLL’s cosmetic brand Lakme is the market leader in the colour cosmetic market with about 50 per cent share in the Rs 70-crore market. Some time back HLL extended the Lakme brand to beauty salons and is now planning to broaden the range of specialised beauty treatments to consumers. The company also plans to expand the number of Lakme salons to 15 by 00-end from the current 40 plus salons in India.


Lakme Beauty Salons are present in Delhi, Chandigarh, Jullundhar, Ludhiana, Amritsar, Mumbai, Nashik, Goa, Aurangabad, Bangalore, Chennai, Mysore, Managalore and Coimbatore. HLL has also entered into an alliance with the Taj group of hotels and has set up unisex Lakme salons at some of the Taj’s key properties in the country.


Procter & Gamble terminates distribution alliance with Marico


Mohini Bhatnagar


0 November 00


Valsad Procter & Gamble Hygiene and Health Care Ltd (PGHH) has terminated its three-year distribution alliance with Marico Industries for its Old Spice, shaving cream, lotion and talcum powder, Pampers diapers and Ariel detergent cake.


At the same time, PGHH announced its decision to license the Old Spice trademark and business to the Goa-based Menezes Cosmetics Pvt Ltd for an undisclosed fee with effect from December 1, 00. Pampers will be distributed by P&GHH and Ariel by P&G Home Products.


The agreement with Menezes Cosmetics covers a period of ten years and is limited to the Old Spice business in India covering after shave lotion, shaving cream and talcum powders under the Old Spice brand, according to the company.


Menezes Cosmetics is part of the year-old CMM Group of Companies, which introduced Old Spice in India in 16 and marketed it till 1.


At present Menezes Cosmetics markets body sprays, aftershave lotions and shaving creams under the XM brand in India. Old Spice is viewed as a strategic fit for the company due to its business focus on the fragrances category.


This move will impact PGHHs sales to the tune of per cent (Rs 16 crore annually) but will not impact its profitability since the estimated license fee revenues are expected to be higher than the profits currently generated by PGHH on the Old Spice business, according to the company.


PGHH intends to focus on its core categories in India, feminine and health care. Old Spice does not fit into the above categories and MCPL will be able to realise the full potential of Old Spice, said Bharat Patel, chairman of PGHH.


P&G has already handed over the marketing and manufacturing licence for an undisclosed fee to Nirma. P&G is not too keen on pumping in the money needed in a competitive market for brands like Camay or Old Spice.


Marico extends its top brands into categories like skincare


Our Corporate Bureau


1 December 00


Mumbai After launching the specialist Kaya skincare clinics in Mumbai recently, Marico Industries is now planning to extend its top brands into categories like skincare, possibly with the intention of pushing the new products at the clinics.


The company has chosen Parachute, Mediker and Shanti Amla brands to extend to other product categories like skincare. According to officials these brands were chosen because they are market leaders with strong brand equity.


For instance, Parachute is the leader in the coconut hair oil market and Shanti Amla has a 1-per cent share of the amla category by volume and enjoys the second-place position to Dabur Amla hair oil. Mediker has a monopoly hold in the anti-lice segment.


Recently Marico extended its anti-lice hair shampoo brand Mediker into anti-lice oil as it felt shampoo was used primarily by those who want a quick and convenient solution to the lice problem. There are others who perceive shampoos to be harsh and don’t want to wash their hair too often; for them oil is more appealing. Also, in India, hair oil is seen as an effective solution to hair problems, while shampoo is seen as being harmful.


Mediker is being positioned as a problem-solving brand and may be extended into areas like acne and scar treatment at the Kaya Clinics, say officials. The brand is expected to double its growth rate to 0 per cent by next fiscal.


Marico acquired the Rs 11-crore Mediker brand from Procter &Gamble a few years ago. The company has earmarked an investment of Rs crore till March 004 for the franchise of Mediker brand. Says a company official “Mediker oil will become as big a brand as the shampoo within the first year itself, considering oil is a much bigger market than shampoo.”


Parachute, the Rs 00-crore brand, has also been extended to other product categories. The recently launched variant Parachute Jasmine has been a success and has already registered a turnover of Rs crore, according to the company.


Simultaneously, Marico plans to withdraw product variants that do not generate volumes. For instance, it recently withdrew the anti-dandruff oil from Parachute since it did not generate the expected volumes. Marico is also pushing Oil of Malabar, a low-volume brand, acquired from its sister concern Bombay Oil Industries, as a price warrior in the largely unbranded oil market.


Marico’s strategy has been on increasing its presence across the entire hair oil and edible oil segments through launching value-added products and through brand and product extensions. At the same time the company has been tackling the unorganised segment through low-cost and small-unit packs.


While the coconut oil market size is estimated at Rs 750 crore, the unorganised segment is estimated at double its size. The company over the past one year has made a lot of progress in the value-added hair oil and problem-solving hair oil segments through Parachute Jasmine and Mediker (for anti-dandruff treatment) mainly because these offer greater margins compared to other segments.


Marico Industries presents Kaya Skin Clinic, the best in skincare


Deepa Thomas


6 February 00


Mumbai The Kaya Skin Clinic at Juhu which offers advanced skincare services, was inaugurated recently by renowned model Mrs World 000 Aditi Govitrikar and Harsh Mariwala, chairman and managing director, Marico Industries. At the launch, the unique product range of Kaya skin solutions was also unveiled. The launch marked the opening of the Kaya Skin Clinics at Bandra and Juhu, boroughs of Mumbai.


Kaya Skin Clinic is a new venture from the Marico Industries stable � makers of Parachute, Saffola and Revive. It presents a solution for all skincare needs through a series of unique and personalised treatments that visibly improve the way your skin looks, acts and feels. These advanced skincare services use US Food and Drug Administration-approved, best-in-class technology that are most suited for Indian skin (type IV and V). The skin treatments are offered by highly trained skin practitioners under the supervision of an in-clinic dermatologist in a professional, serene, Zen-like environment.


Each of the unisex procedures is a carefully balanced combination of science and aesthetics designed to substantially improve the skin’s overall performance. The services that Kaya offers include laser hair removal, skin polishing and brightening, glycolic and salicilic peels, acne and acne scar reduction, photorejuvenation, microcurrent facial toning, deep wrinkle removal (Botox), fillers (Restylane) etc. Kaya Skin Clinic is the lunchtime, no downtime, hassle-free, friendly way to take care of your skin.


Dr Malavika Kohli, an eminent consulting dermatologist, is a member of the medical advisory board that is guiding this venture. Housed in the Zen-like environment of a spa, the unisex clinic’s relaxing beige tones are designed under the artistic guidance of Archana Mariwala and Geeta Raheja to calm and soothe customers. The pampering at Kaya Skin Clinic starts from the moment you walk through the door and begin your journey of discovery. You are greeted by trained skin-practioners dressed in chic uniforms designed by Bhairavi Jaikishen. Sip a refreshing welcome Kaya drink concocted by noted foodie Karen Anand.


Says Harsh Mariwala “The skin treatments offered are highly advanced. Safe cosmetic dermatology treatments that are customised for Indian skin are offered under the guidance of eminent dermatologists. Kaya Skin Clinic is Marico’s unique offering for the Indian consumer to provide them with the skin they want.”


Source IRIS ( August 00)


Harsh Mariwala, chairman and managing director of Marico Industries (Q, N,C,F) and one of the promoters, has acquired 1,6,000 shares of the personal care player on August 8.


Following the purchase, Mariwala`s total shareholding in Marico Industries stands at ,17,600 shares or .164 per cent of the total share capital.


At the end of the first quarter of current fiscal, Harsh Mariwala`s holding in Marico stood at 4,10,000 shares or 1.41 per cent of the paid-up share capital.


At the BSE at 155 pm, Marico shares were trading higher at Rs 15.00, up Rs 8.40 or 4.07 per cent against its previous close of Rs 06.60.


Source IRIS (1 August 00)


Marico Industries (Q, N,C,F) Ltd expects the new products or businesses to boost the turn-over in the short run, but net profit growth would be slow, revealed the company annual report for the fiscal year 00-0. Marico`s quarterly numbers could face fluctuations arising out of mismatches in the timings of the investment in new products and businesses and earnings of the traditional businesses or products, says the report.


As per the report, `While new products / categories / businesses are expected to shore up top-line in the short run, the positive impact on the bottom line could be felt only with a lag. Marico recognizes that at this crucial juncture in its move up the value chain, excessive focus on short-term financial targets is likely to distract it from the long-term strategic objectives of establishing itself on a firm footing in new businesses.`


In fiscal year 00-04, Marico will be making substantial investments in new businesses such as Kaya and Sundari.


In Q FY0, Marico opened its first `Kaya Skin Clinic` in Mumbai. Marico`s equity contribution in subsidiary, Kaya Aesthetics Limited (KAL) is 76 per cent. The Kaya business is expected to consolidate on the prototype phase learnings from the three clinics that were operational by the end of fiscal year 00-0 and to put up a significantly larger number of clinics all through fiscal 004, within and outside India. The report says,`This gradient of outlet expansion in a nascent business will take up a commensurate share of strategic funding. It is expected that the investment phase will continue for the next few quarters, at least into early fiscal 005.`


In Q4 FY0, Marico (6%) and its affiliate Adil & Associates (7.5%) acquired a 70.5 per cent equity stake in Sundari LLC, the newly formed joint venture between Marico and Shantih LLC. Shantih LLC, which is owned by the founders of SUNDÃRI and a group of private investors, own the remaining .5 per cent. Sundari LLC is a US company owning the SUNDÃRI line of luxury ayurvedic skin care products (00 turnover ~$1 million).


The report says, `Although we expect that the investment phase will continue for the near future, the key imperative during fiscal 004 will be to turn around the business and establish it on a sound basis, which is capable of delivering profits in the years to come.`


Source IRIS (18 July 00)


During the first quarter ended June 0, 00, (Q1FY04), the consumer products business of FMCG major Marico continued to grow at a healthy pace. The business (comprising Marico Industries (Q, N,C,F) and Marico Bangladesh) posted a 14 per cent growth in turnover at Rs 08 crore over Q1FY0. Driven by an 8 per cent volume growth in its high margin portfolio, profit before tax (PBT) grew 1 per cent at Rs 18.0 crore and profit after tax (PAT) was up 18 per cent at Rs 15.0 crore.


New products in the consumer products portfolio continued to grow. On a moving annual basis, they now contribute Rs 145 crore, or 18 per cent of total turnover as against 16 per cent for Q1FY0.


ROCE of the consumer products business was 6 per cent (Q1FY0 � per cent). Annualised return on net worth (RONW) during Q1FY0 was at per cent (Q1FY0 � 6 per cent).


Speaking on the results, Harsh Mariwala, chairman and managing director, said, `We are in an important phase of transformation. The first quarter built upon the achievements of FY0, which was a significant year in Marico`s continuous and proactive journey � towards becoming an even higher value-adding company. We will continue to make substantial investments in new products, businesses and territories, while consolidating our flagships. This will help create an enduring business � to continuously deliver value to our shareholders.`


Parachute consolidated its domestic market leadership, in both the urban and rural markets. Hair oil volumes grew 18 per cent, strengthening Marico`s second rank. In the anti-lice category, Mediker volumes grew per cent, as the success of Mediker anti-lice oil helped expand the market.


Marico`s refined oils franchise shrunk marginally, as it consciously withdrew focus from low margin oils like soya and safflower, shortages in which continued for most of the quarter. Saffola blends, however, maintained volumes. Sweekar Sunflower Oil volumes grew marginally, despite Marico focusing on protecting margins.


Over the recent past, the number of consumer packs sold every month by Marico in India has grown from .50 crore to 4.60 crore, signaling an increasing consumer reach.


The quarter saw the nurturing of two new businesses � Aesthetics Services and Global Ayurvedics � carried on in subsidiaries � Kaya Aesthetics (Kaya Skin Clinics) and Sundari LLC (Ayurvedic skin care products in the US). The new businesses met the action standards during the quarter. The opening of more clinics expanded the Kaya business. The Sundari business grew in the desired direction, with the implementation of a revised business plan and introduction of new channels like Spa and QVC. Marico`s stake in the combined turnover of the new businesses was Rs 1.0 crore.


As Marico`s successful consumer products business can afford to support the above nascent businesses, significant initiatives for brand building were put in place, which led to a negative bottom-line of Rs 1.70 crore for the new businesses.


As a result, PAT grew 1.1 per cent at Rs 14.81 crore, compared to Rs 1 crore.


In the international consumer products business, turnover rose 4 per cent, led by a growth of nearly 50 per cent in the coconut oil franchise in Bangladesh and hair creams in the Gulf. The coconut oil and premium hair oil offerings improved their market standing in, both, the Gulf and Bangladesh.


Particulars Q1FY04 Q1FY0


Net Sales and Services 0.16 175.57


Other Income 0.57 0.50


Total Revenue 0.7 176.08


Total Expenditure


(Increase)/Decrease in Stock-in-trade 11.7 .7


Consumption of Raw Materials 100.7 70.46


Packing Material Consumed 18.57 16.5


Sub-Total 10. 10.6


Staff Cost .5 8.78


Advertisement & Sales Promotion 14. 14.15


Other Expenditure 7. .40


Total Expenditure 18.08 156.0


Interest 0.4 0.46


Gross Profit after interest but before depreciation & taxation 0. 1.60


Depreciation .68 .6


Profit before Tax 17.54 15.7


Provision for Taxation (Current) .1 1.5


Profit after Tax (Current) 15.5 14.45


Provision for Taxation (Deferred Taxation) net of write back 0.54 1.45


Profit after Tax 14.81 1.00


Earnings Per Share ( EPS) Not Annualised 4.1 4.48


Particulars Q1FY04 Q1FY0


Segment Revenue


Consumer Products 0.16 175.57


Others 0.00 0.00


0.16 175.57


Less Inter Segment revenue 0.00 0.00


Net Sales/Income from operations 0.16 175.57


Segment Result (Profit before Interest and Tax)


Consumer Products 17.8 16.4


Others 0.00 0.00


17.8 16.4


Less Interest 0.4 0.46


Less Other un-allocable expenditure (net of un-allocable income)


Total Profit Before Tax 17.55 15.7


Capital Employed (Segment Assets - Segment Liabilities)


Consumer Products 1.1 .1


Others 1.1 0.00


Add Unallocated Capital Employed 0.00 0.00


1.5 .1


Wipro, Marico set for legal battle over Chandrika


Source IRIS News Digest (0 June 00)


The stage seems set for a legal battle between diversified conglomerate Wipro (Q, N,C,F) and FMCG major Marico over the Chandrika soap brand, reports the Economic Times. Wipro announced that it had reached an agreement with the owners of Chandrika, to market the brand in select states of India. Wipro is excited to be associated with a leading brand like Chandrika and hope that this will lead to a long-term relationship. Acquiring the brand will align with our current strengths in markets like AP, where our Santoor soap is already the market leader with a market share of 17 per cent. Informed sources feel that Wipro may have made the acquisition at Rs 40-45 crore.


Wipro may soon find itself embroiled in a confrontation with Marico, which claims to have signed an MoU (described as a termsheet by the Chandrika family), with the owners of Chandrika. The MoU envisages that the Bangalore-based SV Products, which own the brand, will undertake, contract manufacturing of the soap for Marico.


Client Marico Industries


Product Pouch Coconut Oil


Brand Parachute


Task for the Agency


Create awareness for Parachute Coconut Oil Pouch in towns with less than 0000 population in Tamil Nadu.


Convert loose oil buyers into Parachute pouch customers, by highlighting the advantages of the Parachute brand.


Convince them to pay a small premium for the brand.


Communication Strategy


The Van Campaign aimed exclusively for women and for the first time conducted by women.


Get the women folk out of their homes and participate in a van campaign which usually is dominated by men and children.


Make them stay through the van programme and ensure their active involvement.


Result


According to Marico, substantial increase in sales reported from the campaign areas.


A study by Marico showed a 5% conversion from loose coconut oil usage to Parachute Pouch Pack, Post Van Campaign.


The success of the campaign motivated Marico to repeat the campaign the following year even in towns with 1 lakh + population, with excellent results.





Marico Industries may have got its act together on the revenue front, but the company has lost two senior executives in the space of a few months.


Last week, Arvind Mediratta, Maricos head of marketing, resigned to join consumer durable giant Whirlpool of India as its vice-president (marketing). In March, Maricos chief executive officer of a few months, Jaspal Bajwa, had suddenly quit citing health reasons.


Medirattas departure was all the more surprising considering that he had only recently been promoted as Maricos overall marketing head. He earned his spurs last year by driving a massive restructuring of the marketing department. Mediratta, snagged from Procter & Gamble, had set up systems and processes that helped bring in greater accountability and focus into marketing. As a result, Maricos topline growth improved with new products contributing nearly 17% of the turnover in FY0 (up from about 1% in FY0), reducing the companys dependence on old cash cows - Parachute and Saffola.


Apparently there were personal reasons that influenced Medirattas decision to relocate to the Capital. But theres no denying that his exit will leave a big vacuum in Marico. The news is still under wraps and may eventually be announced to employees this week.


Maricos loss could well be Whirlpools gain. The US major, which has built a Rs 1,00-crore business in India, is struggling to combat the strong challenge from Korean chaebols Samsung and LG. Sources indicate that the two Korean companies continue to invest huge sums in their Indian operations. Their parent entities back home are willing to take huge losses for a while.


Medirattas major challenge would be to shore up the Whirlpool brand to counter the Korean onslaught. As the youngest member of the Whirpool executive committee, his performance will be watched with keen eyes.


Marico cuts procurement costs


When Marico Industries, the Rs 700 crore FMCG company, decided to set up its third manufacturing plant in Pondicherry, it wanted to cut down on outsourcing costs that amounted to Rs 4 crore annually. Hence, the company chose indiamarkets’ e-procurement and reverse auction solution, which has helped them reduce the total cost of outsourcing by 0 percent, says Akhtar Pasha


According to Rohan ajila, indiamarkets, which has 4 e-business centres across the country, was the only vendor who could meet Marico’s requirements


For over a decade Marico Industries has been manufacturing a variety of products including its flagship Parachute coconut oil. The company’s portfolio of nine brands includes Sil jam, Sweekar and Saffola cooking oils. Today Marico has six factories, depots and ,500 distributors spread across India.Marico’s e-procurement solution at a glance


Challenges· High procurement cost�Marico used to spend Rs 4 crore annually on outsourcing its business processes. · Dozens of suppliers were involved. · Process efficiencies needed to be improved. SolutionFor the procurement services, indiamarkets has used its Procurement Management Solution to select suppliers. The bidding process was done using Ariba’s Dynamic Trade e-business engine for conducting online reverse auctions. indiamarkets’ backend infrastructure consists of three IBM Netfinity and three Sun E50 servers. Microsoft’s SQL Server 000 is the database being used.Benefits· Marico’s Pondicherry plant has been able to reduce outsourcing cost by 0 percent. · The company deals with just three suppliers. · Faster RoI. · Process efficiency has increased.


Costly outsourcing processMarico has two plants at Goa and Kanjikode that manufacture Parachute coconut oil. These plants have three Integrated Ancillary Units (IAU)�each of them catering to outsourcing processes such as blow moulding of oil containers, printing, filling oil containers and despatching the finished products to suppliers across the country. This procedure of outsourcing business processes to suppliers cost the company Rs 4 crore annually.When the requirement for a third plant in Pondicherry came up, Marico decided to do things differently. In September 001, Marico approached indiamarkets for its e-procurement and reverse auction services. indiamarkets’ e-commerce services include supplier catalogues, e-procurement and sales and distribution solutions and online and reverse auctions. These services are delivered using the Internet through a nationwide network of e-business centres from where suppliers can access an online marketplace. Rohan Ajila, the CEO of indiamarkets says, “During those times there was no other vendor who could have met Marico’s requirements. We operate from 4 offices in locations across the country with 00 procurement specialists who have domain expertise in 0 verticals and a database of 75,000 suppliers.”In November 00, the company decided to set up a plant in Pondicherry with three Integrated Ancillary Units located within the plant premises. The idea was to slash outsourcing costs and improve process efficiencies, thereby boosting the bottom line by increasing sales and marketing revenues. Moreover Ajila adds that with all three IAUs within the premises, the company could do away with the existing fragmented structure of the supply chain and help in bringing down transport costs and time. This also helped cut down its list of suppliers. Getting trusted suppliers in a short time was the most challenging task, say Marico officials. Says Ajila “After getting the project our first step was to identify the right kind of suppliers. Marico had given us some parameters for the selection process,” says Ajila.Zeroing in on key suppliersIn the first phase, indiamarkets identified thirty-three suppliers from fifteen locations across the country. Ajila says, “All our 4 e-business centres across the country took part in identifying suppliers. We did the selection process using our procurement management service.” After the physical validation of suppliers (this process involves conducting interviews with suppliers, making factory visits to check their expertise and infrastructure), indiamarkets, in collaboration with Marico, narrowed it down to ten suppliers. “The entire process of screening the suppliers took 45 days,” adds Ajila.Prior to the auction, the participating suppliers were familiarised with the rules and procedures of the bidding mechanism by the indiamarkets team. A team of indiamarkets experts trained the short-listed suppliers on using indiamarkets’ reverse auction engine that uses Ariba’s ‘Dynamic Trade’ e-business engine to conduct online reverse auctions. indiamarkets has networked 00 PCs to Dynamic Trade used in the online auction. The back-end database is on Microsoft SQL Server 000. Three IBM Netfinity and three Sun E50 enterprise servers are being used for the e-procurement system.In April 00, Marico’s Pondicherry plant went on stream with three IAUs set up by suppliers to cater to the entire process � supplying oil containers, labelling of containers and supply to dealers and distributors across the country.PaybackHarsh Mariwala, the CEO of Marico Industries, says, “indiamarkets brought their project management expertise in addition to understanding our business processes, thereby helping us to get this project up and running in five months. The tangible benefits are�we have been to able to reduce total cost of outsourcing by 0 percent in just five months of operations, which otherwise used to cost Rs 4 crore per annum.” Without actually travelling to each supplier’s premises, Marico has got the best of the lot and that adds to the other benefits of using indiamarkets’ solution.Marico today looks to a future without the procurement bottlenecks faced by its competitors. The company is evaluating the pros and cons of adopting a similar system at its existing plants at Goa and Kanjikode that continue to use conventional outsourcing processes.








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