Looking ahead, he expects the FMCG industry to grow by 15 per cent, and Godrej by 20 per cent. He says that the company is looking at acquisitions overseas.
Excerpts from CNBC-TV18's exclusive interview with Adi Godrej:
Are prices going up in your product categories?
Generally yes, because there is a bit of a cost-push. Consumption demand is good, and most companies are taking price increases.
In which segments in specific are you seeing more traction than the rest?
In most items that consume petrochemicals such as detergents and shampoos, cost increases are quite considerable. Cost increases have been registered in the soap category, especially with vegetable oil prices rising. So these are industries in which I see price increases coming. There will be price increases in FMCG pretty much across the board over the next six months.
What are consumption patterns like now? Are you seeing any signs of uptrading at all in the categories that you are present in?
I don't know about uptrading, but the downtrading has certainly stopped. I don't see too many signs of particular uptrading, but consumption is going up tremendously. FMCG grew by about 10 per cent in the last financial year overall, and this year I expect there will be a 15per cent growth overall. Our company's growth is faster than the category growth. So we are growing at around 20 per cent.
How much market share do you expect to garner by the end of this financial year?
That is difficult to say. We do not know how the general industry will grow, but our market share, especially in our soaps business, is growing quite considerably.
Do you expect to see some more consolidation in the segments you are present in? Do you have any kind of inorganic moves lined up as well?
I do not see much inorganic growth in India currently in the FMCG sector that is not much in play; not many M&As are taking place. I think, as there is a strong retail consolidation over the next three-five years that may bring some smaller companies to the table.
Will you look at inorganic plans outside of the country?
Yes, certainly. We made two acquisitions within the last 12 months already, one in Britain and other one in South Africa, and we are looking at others especially in the developing world.
What exactly are your plans on the real estate front and specifically on SEZs?
We are growing real estate tremendously. We have about 20 million square feet under construction currently in Godrej Properties, which is a subsidiary of Godrej Industries. That will keep growing. Opportunities are tremendous. We may convert one-two of our projects into SEZs.
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