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Fast Moving Consumer Goods (FMCG)

FMCG are products that have a quick shelf turnover, at relatively low cost and
don't require a lot of thought, time and financial investment to purchase. The
margin of profit on every individual FMCG product is less. However the huge
number of goods sold is what makes the difference. Hence profit in FMCG goods
always translates to number of goods sold.

Fast Moving Consumer Goods is a classification that refers to a wide range of


frequently purchased consumer products including: toiletries, soaps, cosmetics,
teeth cleaning products, shaving products, detergents, other non-durables such
as glassware, bulbs, batteries, paper products and plastic goods, such as
buckets.

‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances


that are generally replaced less than once a year. The category may include
pharmaceuticals, consumer electronics and packaged food products and drinks,
although these are often categorized separately.

The term Consumer Packaged Goods (CPG) is used interchangeably with Fast
Moving Consumer Goods (FMCG).

Three of the largest and best known examples of Fast Moving Consumer Goods
companies are Nestlé, Unilever and Procter & Gamble. Examples of FMCGs are
soft drinks, tissue paper, and chocolate bars. Examples of FMCG brands are
Coca-Cola, Kleenex, Pepsi and Believe.

The FMCG sector represents consumer goods required for daily or frequent use.
The main segments of this sector are personal care (oral care, hair care, soaps,
cosmetics, toiletries), household care (fabric wash and household cleaners),
branded and packaged food, beverages (health beverages, soft drinks, staples,
cereals, dairy products, chocolates, bakery products) and tobacco.
The Indian FMCG sector is an important contributor to the country's GDP. It is the
fourth largest sector in the economy and is responsible for 5% of the total factory
employment in India. The industry also creates employment for 3 m people in
downstream activities, much of which is disbursed in small towns and rural India.
This industry has witnessed strong growth in the past decade. This has been due
to liberalization, urbanization, increase in the disposable incomes and altered
lifestyle. Furthermore, the boom has also been fuelled by the reduction in excise
duties, de-reservation from the small-scale sector and the concerted efforts of
personal care companies to attract the burgeoning affluent segment in the
middle-class through product and packaging innovations.

Unlike the perception that the FMCG sector is a producer of luxury items targeted
at the elite, in reality, the sector meets the every day needs of the masses. The
lower-middle income group accounts for over 60% of the sector's sales. Rural
markets account for 56% of the total domestic FMCG demand.

Many of the global FMCG majors have been present in the country for many
decades. But in the last ten years, many of the smaller rung Indian FMCG
companies have gained in scale. As a result, the unorganized and regional
players have witnessed erosion in market share.

History of FMCG in India


In India, companies like ITC, HLL, Colgate, Cadbury and Nestle have
been a dominant force in the FMCG sector well supported by relatively less
competition and high entry barriers (import duty was high). These companies
were, therefore, able to charge a premium for their products. In this context, the
margins were also on the higher side. With the gradual opening up of the
economy over the last decade, FMCG companies have been forced to fight for a
market share. In the process, margins have been compromised, more so in the
last six years (FMCG sector witnessed decline in demand).
Current Scenario
The growth potential for FMCG companies looks promising over the long-
term horizon, as the per-capita consumption of almost all products in the country
is amongst the lowest in the world. As per the Consumer Survey by KSA-
Technopak, of the total consumption expenditure, almost 40% and 8% was
accounted by groceries and personal care products respectively. Rapid
urbanization, increased literacy and rising per capita income are the key growth
drivers for the sector. Around 45% of the population in India is below 20 years of
age and the proportion of the young population is expected to increase in the
next five years. Aspiration levels in this age group have been fuelled by greater
media exposure, unleashing a latent demand with more money and a new
mindset. In this backdrop, industry estimates suggest that the industry could
triple in value by 2015 (by some estimates, the industry could double in size by
2010).
In our view, testing times for the FMCG sector are over and driving rural
penetration will be the key going forward. Due to infrastructure constraints (this
influences the cost-effectiveness of the supply chain), companies were unable to
grow faster. Although companies like HLL and ITC have dedicated initiatives
targeted at the rural market, these are still at a relatively nascent stage.
The bottlenecks of the conventional distribution system are likely to be removed
once organized retailing gains in scale. Currently, organized retailing accounts for
just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. In
our view, organized retailing results in discounted prices, forced-buying by
offering many choices and also opens up new avenues for growth for the FMCG
sector. Given the aggressive expansion plans of players like Pantaloon, Trent,
Shopper’s Stop and Shoprite, we are confident that the FMCG sector has a
bright future.

Budget Measures to Promote FMCG


Sector
2% education cess corporation tax, excise duties and custom duties
Concessional rate of 5% custom duty on tea and coffee plantation machinery

Budget Impact
The education cess will add marginally to the tax burden of all FMCG
companies
The dividend distribution tax on debt funds is likely to adversely effect the
other income components of companies like Britannia, Nestle and HLL
The measure to abolish excise duty on dairy machinery is a positive for
companies like Nestle
Concessional rate for tea and coffee plantation machinery is a positive for Tata
Tea, HLL, Tata Coffee and other such companies
Duty reduction in food grade hexane will have a marginally positive impact on
companies like Marico and HLL
Area specific excise exemptions for North East, J&K, Himachal Pradesh will
continue to encourage FMCG companies to relocate to these areas.

Budget over the


years

Budget 2001-02 Budget 2002-03 Budget 2003-04

• From 35-55% to • Increased focus • Excise on biscuits


75% for crude on agricultural reduced to 8%
edible oil reforms with an from 16%. Excise
• From 45-65% to aim to integrate on soft drinks and
85% for refined the countrywide sugar boiled
edible oil food market confectionery also
• From 35% to 70% • Deregulation of reduced
for copra, the milk • All states to
coconut, tea and processing switch to VAT in
coffee capacity FY04 (deadline
• From 25% to 55% • Excise duty now has been
for crude palm oil structure largely extended till end
• Development untouched. Only FY05)
allowance of tea for tea, the duty • Loans to
industry raised to was reduced from agriculture and to
40% from 20% Rs 2 per Kg to Re small-scale sector
• All food 1 will now be
preparations • Customs duty on available at
based on fruits tea and coffee maximu 2%
and vegetables doubled to 100% above prime
(pickles, sauces, • Duty on imported lending rate
ketchup, juices, pulses upped to (PLR)
jams etc.) made 80% • Development
completely plans for roads,
exempt from • Import duty on ports, railways
excise duty wine and liquor and airports
slashed from
• Excise on 210% to 180% • Customs duty on
cosmetics and alcoholic
toiletries halved to beverages
16% reduced
India offers a large and growing market of 1 billion people of which 300 million
are middle class consumers. India offers a vibrant market of youth and vigor with
54% of population below the age of 25 years. These young people work harder,
earn more, spend more and demand more from the market, making India a
dynamic and aspirational society. Domestic demand is expected to double over
the ten-year period from 1998 to 2007. The number of households with "high
income" is expected to increase by 60% in the next four years to 44 million
households.

India is rated as the fifth most attractive emerging retail market. It has
been ranked second in a Global Retail Development Index of 30 developing
countries drawn up by A T Kearney. A.T. Kearney has estimated India's total retail
market at $202.6 billion, is expected to grow at a compounded 30 per cent over
the next five years. The share of modern retail is likely to grow from its current 2
per cent to 15-20 percent over the next decade, analysts feel.

The Indian FMCG sector is the fourth largest sector in the economy with
a total market size in excess of US$ 13.1 billion. The FMCG market is set to
treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level
as well as per capita consumption in most product categories like jams,
toothpaste, skin care, hair wash etc in India is low indicating the untapped market
potential. Burgeoning Indian population, particularly the middle class and the
rural segments, presents an opportunity to makers of branded products to
convert consumers to branded products.

India is one of the world’s largest producers for a number of FMCG


products but its FMCG exports are languishing at around Rs 1,000 crore only.
There is significant potential for increasing exports but there are certain factors
inhibiting this. Small-scale sector reservations limit ability to invest in technology
and quality up gradation to achieve economies of scale. Moreover, lower volume
of higher value added products reduce scope for export to developing countries.
The FMCG sector has traditionally grown at a very fast rate and has
generally out performed the rest of the industry. Over the last one year, however
the rate of growth has slowed down and the sector has recorded sales growth of
just five per cent in the last four quarters.
The outlook in the short term does not appear to be very positive for the
sector. Rural demand is on the decline and the Centre for Monitoring Indian
Economy (CMIE) has already downscaled its projection for agriculture growth in
the current fiscal. Poor monsoon in some states, too, is unlikely to help matters.
Moreover, the general slowdown in the economy is also likely to have an adverse
impact on disposable income and purchasing power as a whole. The growth of
imports constitutes another problem area and while so far imports in this sector
have been confined to the premium segment, FMCG companies estimate they
have already cornered a four to six per cent market share. The high burden of
local taxes is another reason attributed for the slowdown in the industry
At the same time, the long term outlook for revenue growth is positive. Give the
large market and the requirement for continuous repurchase of these products,
FMCG companies should continue to do well in the long run. Moreover, most of
the companies are concentrating on cost reduction and supply chain
management. This should yield positive results for them.

The profile of major leading FMCG Market Players is as follows:


1. NESTLE INDIA

Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. With six factories and a
large number of co-packers, Nestlé India is a vibrant Company that provides
consumers in India with products of global standards and is committed to long-
term sustainable growth and shareholder satisfaction.

The Company insists on honesty, integrity and fairness in all aspects of its
business and expects the same in its relationships. This has earned it the trust
and respect of every strata of society that it comes in contact with and is
acknowledged amongst India's 'Most Respected Companies' and amongst the
'Top Wealth Creators of India'.
Nestlé’s relationship with India dates back to 1912, when it began trading as The
Nestlé Anglo-Swiss Condensed Milk Company (Export) Limited, importing and
selling finished products in the Indian market.

Brief History
After India’s independence in 1947, the economic policies of the Indian
Government emphazised the need for local production. Nestlé responded to
India’s aspirations by forming a company in India and set up its first factory in
1961 at Moga, Punjab, where the Government wanted Nestlé to develop the milk
economy. Progress in Moga required the introduction of Nestlé’s Agricultural
Services to educate, advise and help the farmer in a variety of aspects. From
increasing the milk yield of their cows through improved dairy farming methods,
to irrigation, scientific crop management practices and helping with the
procurement of bank loans. Nestlé set up milk collection centres that would not
only ensure prompt collection and pay fair prices, but also instil amongst the
community, a confidence in the dairy business. Progress involved the creation of
prosperity on an on-going and sustainable basis that has resulted in not just the
transformation of Moga into a prosperous and vibrant milk district today, but a
thriving hub of industrial activity, as well. For more on Nestlé Agricultural
Services,
Nestlé has been a partner in India's growth for over nine decades now and has
built a very special relationship of trust and commitment with the people of India.
The Company's activities in India have facilitated direct and indirect employment
and provides livelihood to about one million people including farmers, suppliers of
packaging materials, services and other goods.

The Company continuously focuses its efforts to better understand the changing
lifestyles of India and anticipate consumer needs in order to provide Taste,
Nutrition, Health and Wellness through its product offerings. The culture of
innovation and renovation within the Company and access to the Nestlé Group's
proprietary technology/Brands expertise and the extensive centralized Research
and Development facilities gives it a distinct advantage in these efforts. It helps
the Company to create value that can be sustained over the long term by offering
consumers a wide variety of high quality, safe food products at affordable prices.

Nestlé India is a responsible organization and facilitates initiatives that help to


improve the quality of life in the communities where it operates. Beginning with its
first investment in Moga in 1961, Nestlé’s regular and substantial investments
established that it was here to stay. In 1967, Nestlé set up its next factory at
Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the area into
soluble tea. The Nanjangud factory (Karnataka), became operational in 1989, the
Samalkha factory (Haryana), in 1993 and in 1995 and 1997, Nestlé
commissioned two factories in Goa at Ponda and Bicholim respectively. Nestlé
India is now putting up the 7th factory at Pant Nagar in Uttaranchal

Products

Product Category Brands


NESTLÉ EVERYDAY Dairy Whitener
NESTLÉ EVERYDAY Ghee
NESTLÉ Curds
NESTLÉ CEREMEAL

Milk Products NESTLÉ Jeera Raita


NESTLÉ Fresh 'n' Natural Dahi
NESTLÉ Fruit 'N Dahi
NESTLÉ Milk
NESTLÉ Slim Milk
NESCAFÉ CLASSIC
NESCAFÉ SUNRISE

Beverages NESTLÉ MILO


NESCAFÉ 3 in 1
NESCAFÉ Koolerz

Prepared Dishes MAGGI 2-MINUTE Noodles


MAGGI Healthy Soups
MAGGI Dal Atta Noodles
MAGGI MAGIC Cubes
Chocolates &
NESTLÉ Milk Chocolate
Confectionaries
NESTLÉ KIT KAT
NESTLÉ MUNCH
NESTLÉ MILKYBAR
NESTLÉ MILKYBAR CHOO
NESTLÉ BAR-ONE
POLO
NESTLÉ Eclairs
NESTLÉ ACTI-V
POLO Powermint

Financial Trends
Rupees in Millions
2001 2002 2003 2004 2005
Gross Sales 19,210.0 20,472.0 22,798.3 23,728.2 26,438.9
Domestic Sales # 16,110.9 18,109.8 20,226.9 21,292.8 23,847.1
Export Sales 3,099.1 2,362.2 2,571.4 2,435.4 2,591.8
EBITDA * 3,143.6 3,985.3 4,446.8 4,509.9 5,220.5
Other Income 162.3 284.0 278.3 144.5 237.4
Impairment loss on fixed
13.9 212.5 22.2 23.3 26.4
assets
Provision for contingencies 180.9 313.6 229.6 266.9 223.2
Profit before taxation and
2,577.7 3,188.4 3,991.5 3,864.9 4,690.6
exceptional item
Net Profit before exceptional
1,731.5 2,069.1 2,630.8 2,519.2 3,095.7
item
Exceptional item - net of tax - 53.9 - - -
Net Profit after exceptional
1,731.5 2,015.2 2,630.8 2,519.2 3,095.7
item
Earnings per Share (Rs.) 17.96 20.90 27.29 26.13 32.11
Dividends per Share (Rs.) 14.00 18.00 20.00 24.50 25.00
# Domestic Sales include excise duty also
* EBITDA - Earnings before Interest, Tax, Depreciation and Amortization.

1. Hindustan Lever Limited (HLL)

The Global arm of Hindustan Levers Limited is Unilever's and its mission is to
add Vitality to life. Their products meet everyday needs for nutrition, hygiene, and
personal care with brands that help people feel good, look good and get more out
of life.

HLL has deep roots in local cultures and markets around the world which gives
them a strong relationship with their consumers, which are the foundation for
their future growth. They benefit from there wealth of knowledge and international
expertise to the service the local consumers - a truly multi-local multinational.

Brief History
In the summer of 1888, visitors to the Kolkata harbour noticed crates full of
Sunlight soap bars, embossed with the words "Made in England by Lever
Brothers". With it, began an era of marketing branded Fast Moving Consumer
Goods (FMCG). In 1931, Unilever set up its first Indian subsidiary, Hindustan
Vanaspati Manufacturing Company, followed by Lever Brothers India Limited
(1933) and United Traders Limited (1935). These three companies merged to
form HLL in November 1956; HLL offered 10% of its equity to the Indian public,
being the first among the foreign subsidiaries to do so. Unilever now holds
51.55% equity in the company. The rest of the shareholding is distributed among
about 380,000 individual shareholders and financial institutions. Pond's (India)
Limited had been present in India since 1947. It joined the Unilever fold through
an international acquisition of Chesebrough Pond's USA in 1986.

The liberalization of the Indian economy, started in 1991, clearly marked an


inflexion in HLL's and the Group's growth curve. Removal of the regulatory
framework allowed the company to explore every single product and opportunity
segment, without any constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In


one of the most visible and talked about events of India's corporate history, the
erstwhile Tata Oil Mills Company (TOMCO) merged with HLL, effective from April
1, 1993. In 1995, HLL and yet another Tata company, Lakme Limited, formed a
50:50 joint venture, Lakme Lever Limited, to market Lakme's market-leading
cosmetics and other appropriate products of both the companies. Subsequently
in 1998, Lakme Limited sold its brands to HLL and divested its 50% stake in the
joint venture to the company.

HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation
in 1994, which markets Huggies Diapers and Kotex Sanitary Pads. HLL has also
set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory
represents the largest manufacturing investment in the Himalayan kingdom. The
NLL factory manufactures HLL's products like Soaps, Detergents and Personal
Products both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances
on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired
Kothari General Foods, with significant interests in Instant Coffee. In 1993, it
acquired the Kissan business from the UB Group and the Dollops Icecream
business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two


plantation companies of Unilever, were merged with Brooke Bond. Then in July
1993, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton
India Limited (BBLIL), enabling greater focus and ensuring synergy in the
traditional Beverages business. 1994 witnessed BBLIL launching the Wall's
range of Frozen Desserts. By the end of the year, the company entered into a
strategic alliance with the Kwality Icecream Group families and in 1995 the
Milkfood 100% Icecream marketing and distribution rights too were acquired.

In January 2000, in a historic step, the government decided to award 74 per cent
equity in Modern Foods to HLL, thereby beginning the divestment of government
equity in public sector undertakings (PSU) to private sector partners. HLL's entry
into Bread is a strategic extension of the company's wheat business. In 2002,
HLL acquired the government's remaining stake in Modern Foods.

In 2003, HLL acquired the Cooked Shrimp and Pasteurised Crabmeat business
of the Amalgam Group of Companies, a leader in value added Marine Products
exports.

Present Stature
Hindustan Lever Limited (HLL) is India's largest Fast Moving Consumer Goods
company, touching the lives of two out of three Indians with over 20 distinct
categories in Home & Personal Care Products and Foods & Beverages. They
endow the company with a scale of combined volumes of about 4 million tonnes
and sales of Rs.10,000 crores.
HLL is also one of the country's largest exporters; it has been recognised as a
Golden Super Star Trading House by the Government of India.

HLL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,
Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-
Annapurna, Kwality Wall's – are household names across the country and span
many categories - soaps, detergents, personal products, tea, coffee, branded
staples, ice cream and culinary products. They are manufactured in close to 80
factories. The operations involve over 2,000 suppliers and associates. HLL's
distribution network, comprising about 7,000 redistribution stockists, directly
covers the entire urban population, and about 250 million rural consumers.

HLL believes that an organization’s worth is also in the service it renders to the
community. HLL is focusing on health & hygiene education, women
empowerment, and water management. It is also involved in education and
rehabilitation of special or underprivileged children, care for the destitute and
HIV-positive, and rural development. HLL has also responded in case of national
calamities / adversities and contributes through various welfare measures, most
recent being the village built by HLL in earthquake affected Gujarat, and relief &
rehabilitation after the Tsunami caused devastation in South India.

Products
Product Category Product Name Brands
Lux

Pears
Soap Lifebuoy
Liril
Hamam
Breeze
Dove
Rexona
Personal Care Pond’s
Skin Care
Fair & Lovely
Sunsilk
Hair Care: Naturals
Clinic
Pepsodent
Oral Care
CloseUp
Axe
Deodorant
Rexona
Color Cosmetics Lakme
Ayurvedic Healthcare Aysh

Fabric Care Laundry Surf Excel


Rin
Wheel
Brooke Bond
Tea
Beverages Lipton
Coffee Bru
Salt Knnor Annapurna
Foods Sauces Kissan
Ice Creams Kwality Walls

3. GLAXO SMITHKLINE

GlaxoSmithKline is a leader in the worldwide consumer healthcare market. With nearly


$5 billion in sales, over ten $100 million brands and present in 130 markets, the
consumer healthcare business brings an added dynamic dimension to GSK.
Operating in the fiercely competitive environment of retail and consumer marketing
GlaxoSmithKline Consumer Healthcare brings oral healthcare, over-the-counter
medicines and nutritional healthcare products to millions of people.

Brand names such as Panadol the analgesic, Aquafresh toothpaste, Lucozade the
nutritional and Nicorette/ Niquitin smoking cessation products are household names
around the world. In one year GSK Consumer Healthcare produces - among many others
- nine billion tablets to relieve stomach upsets, six billion tablets for pain relief tablets
and 600 million tubes of toothpaste.

But the driving force behind GlaxoSmithKline's consumer healthcare business is science.
With four dedicated consumer healthcare R&D centres and consumer healthcare
regulatory affairs, the business takes scientific innovation as seriously as marketing
excellence and offers leading-edge capability in both.

The Company

The company has a challenging and inspiring mission: to improve the quality of human
life by enabling people to do more, feel better and live longer. This mission gives them
the purpose to develop innovative medicines and products that help millions of people
around the world. In fact, they are the only pharmaceutical company to tackle the World
Health Organization’s three ‘priority’ diseases – HIV/AIDS, tuberculosis and malaria.

Headquartered in the UK and with operations based in the US, it is one of the industry
leaders, with an estimated 7% of the world's pharmaceutical market.

As a company has a emphasized more on research & development, estimated every hour
they spend more than £300,000 (US$562,000) to find new medicines. The medicines
produced are mainly in six major disease areas – asthma, virus control, infections, mental
health, diabetes and digestive conditions. In addition, it is a leader in the important area
of vaccines and are developing new treatments for cancer.

GSK at a glance

• Mission is to improve the quality of human life by enabling people to do more,


feel better and live longer
• Research-based pharmaceutical company
• It is the only pharmaceutical company to tackle the three "priority" diseases identified
by the World Health Organization: HIV/AIDS, tuberculosis and malaria
• Its business employs over 100,000 people in 116 countries
• They make approximately four billion packs of medicines and healthcare products
every year
• Over 15,000 people work in the research teams to discover new medicines
• We supply one quarter of the world's vaccines and by the end of 2005 we had 25
vaccines in clinical development
• In 2005 we donated 136 million albendazole tablets to help elimitate lymphatic
filariasis (elephantiasis)
• In 2005 we shipped 126 million tablets of preferentially-priced Combivir and Epivir
(our HIV treatments) to developing countries
• Almost 100 countries benefitted from our humanitarian product donations in 2005
• We sold 23 million bottle of Lucozade Sport Hydro Active in 2005

History

1976
 The H2 blocker Tagamet (cimetidine) is introduced in the UK by the SmithKline
Corporation, and in the US in the following year.
 The treatment will revolutionise peptic ulcer therapy.

1978
 Through the acquisition of Meyer Laboratories Inc, Glaxo’s business in the US is
started, to become Glaxo Inc from 1980.
 The broad-spectrum injectable antibiotic Zinacef (cefuroxime) is introduced by
Glaxo.

1981
 The anti-ulcer treatment Zantac (ranitidine) is launched by Glaxo and is to
become the world’s top-selling medicine by 1986. Augmentin (amoxicillin /
clavulanate potassium), to combat a wide range of bacterial infections in children
and adults, is launched by Beecham.
 The antiviral Zovirax (aciclovir) is launched by Wellcome for herpes infections

1982
 SmithKline acquires Allergan, an eye and skincare business, and merges with
Beckman Instruments Inc, a company specialising in diagnostics and
measurement instruments and supplies.
 The company is renamed SmithKline Beckman. John Vane of the Wellcome
Research Laboratories is awarded the Nobel Prize, with two other scientists, "for
their discoveries concerning prostaglandins and related biologically active
substances."

1983
 Glaxo Inc moves to new facilities in Research Triangle Park and Zebulon, North
Carolina. The broad-spectrum injectable antibiotic Fortum (ceftazidime) is
launched.
 Wellcome launches Flolan (epoprostenol) for use in renal dialysis.

1986
 Beecham acquires the US firm Norcliff Thayer, adding Tums antacid tablets and
Oxy skin care to its portfolio.

1987
 The AIDS treatment Retrovir (zidovudine) is launched by Wellcome. Glaxo
introduces the oral antibiotic Zinnat (cefuroxime axetil).

1988
 SmithKline BioScience Laboratories acquires one of its largest competitors,
International Clinical Laboratories, Inc, increasing the company's size by half and
establishing SmithKline BioScience Laboratories as the industry leader.
 The Nobel Prize for medicine is awarded to George Hitchings and Gertrude Elion,
of Burroughs Wellcome Inc, and to Sir James Black, who had worked at the
Wellcome Foundation and Smith Kline and French Laboratories, "for their
discoveries of important principles for drug treatment."

1989
 SmithKline Beckman and The Beecham Group plc merge to form SmithKline
Beecham plc. Engerix-B hepatitis B vaccine (recombinant), a genetically
engineered hepatitis B vaccine, is launched in the US and France.

1990
 The synthetic lung surfactant Exosurf and the anti-epileptic drug Lamictal
(lamotrigine) are launched by Wellcome.
 Glaxo introduces long-acting Serevent (salmeterol) for asthma, the inhaled
corticosteroid Flixotide (fluticasone propionate) and Zofran (ondansetron) anti-
emetic for cancer patients.

1991
 Glaxo launches its novel treatment for migraine, Imigran (sumatriptan), Lacipil
(lacidipine) for high blood pressure, and Cutivate (fluticasone propionate) in the
US for skin diseases.
 SmithKline Beecham moves its global headquarters to New Horizons Court at
Brentford, England. SmithKline Beecham’s Seroxat/Paxil (paroxetine
hydrochloride) is launched in the UK, its first market.

1992
 Mepron (atovaquone) for AIDS-related pneumonia is introduced by Burroughs
Wellcome in the US.
 SmithKline Beecham’s Havrix hepatitis A vaccine, inactivated, the world’s first
hepatitis A vaccine, is launched in six European markets.
1993
 SmithKline Beecham and Human Genome Science negotiate a multi-million-
dollar research collaboration agreement for identifying and describing the
functions of the genes in the human body.
 Glaxo introduces Flixotide (fluticasone propionate) for bronchial conditions.

1994
 SmithKline Beecham purchases Diversified Pharmaceutical Services, Inc, a
pharmaceutical benefits manager.
 Sterling Health also is acquired, making SmithKline Beecham the third-largest
over-the-counter medicines company in the world and number one in Europe and
the international markets.
 With the intention of focusing on human healthcare, SmithKline Beecham sells its
animal health business.

1995
 Glaxo and Wellcome merge to form Glaxo Wellcome.
 Glaxo Wellcome acquires California-based Affymax, a leader in the field of
combinatorial chemistry.
 Glaxo Wellcome’s Medicines Research Centre opened at Stevenage in England.
 Valtrex (valaciclovir) is launched by Glaxo Wellcome as an anti-herpes successor
to Zovirax (acyclovir).
 SmithKline Beecham acquires Sterling Winthrop's site in Upper Providence,
Pennsylvania, to fulfil US R&D expansion needs.

1996
 Community Partnership is established by SmithKline Beecham to focus
philanthropy on community-based healthcare.
 SmithKline Beecham Healthcare Services is formed by combining the clinical
laboratories, disease management and Diversified Pharmaceutical Services
businesses.

1997
 SmithKline Beecham’s research centre, New Frontiers Science Park, opens at
Harlow in England.
 SmithKline Beecham and Incyte Pharmaceuticals create a joint venture -
diaDexus - to discover and market novel molecular diagnostics based on the use
of genomics.

1998
 SmithKline Beecham and the World Health Organization announce a
collaboration to eliminate lymphatic filariasis (elephantiasis) by the year 2020.
 The largest pharmaceutical company in Poland is created with the acquisition of
Polfa Poznan by Glaxo Wellcome.
1999
 The 30th anniversary of the launch of Ventolin (albuterol) is marked as respiratory
becomes Glaxo Wellcome’s largest therapeutic area.
 Sharpening its focus on pharmaceuticals and consumer healthcare, SmithKline
Beecham divests SmithKline Beecham Clinical Laboratories and Diversified
Pharmaceutical Services.

GSK Products
Product name: Aquafresh

Major Markets

• North and South America


• Europe
• East and South Africa
• Middle East
• Asia
• Australia and New Zealand

Aquafresh is one of the world's largest and fastest growing toothpaste and
toothbrush brands. The unique red, white and blue stripes of the toothpaste
make the product not only visually attractive, but also underline the triple benefits
of strong teeth, healthy gums and fresh breath – whole mouth protection. The
Aquafresh range of manual and electric toothbrushes not only clean teeth
effectively, they are also gentle on gums because of their flexible necks. Their
flexible heads and brush tips have been designed for cleaning even the hardest-
to-reach parts of the mouth. The Aquafresh range also includes whitening,
sensitive, tartar control and children's toothpaste, children's toothbrushes, dental
lozenges and dental gum.

Product name: ENO

Major Markets

• India
• Brazil
• South Africa and Thailand

ENO is the most global of GSK's gastrointestinal brands with sales of £29 million.
The fast-acting effervescent fruit salts, used as an antacid and reliever of
bloatedness, was invented in the 1850s by James Crossley ENO
Product name: Horlicks

Major Markets

India and UK

Horlicks, 'The Great Family Nourisher,' is a nutritional drink made from wheat,
milk and malted barley and is sold in powdered form. The brand is such an
enormous success in its key market, India, that alongside the traditional family
formula, there is a special formulation for children between one and three years
of age and another for breast-feeding mothers.

Financial review

Operating profit and earnings per share

Operating profit of £1,911 million grew by 13%, which was above the turnover
growth of 9%, reflecting an improved cost of sales margin and higher other
operating income partly offset by increased R&D expenditure. SG&A grew 8%.
Excluding costs for legal matters, SG&A grew by 2%, well below turnover growth.

In the quarter, gains from asset disposals were £91 million (£10 million in 2005),
costs for legal matters were £123 million (£33 million in 2005), the fair value
movements on the Quest collar and Theravance options were unfavorable £69
million (£9 million unfavorable in 2005) and net income related to restructuring
programmes was £4 million (£24 million charge in 2005). The total operating
profit impact of these items was a £97 million charge in 2006, compared with a
£56 million charge in 2005, resulting in a 2 percentage point reduction in
operating profit growth for the quarter.

Profit after taxation grew by 14% which was marginally higher than the growth in
operating profit and reflected lower net interest costs, partially offset by a higher
expected tax rate for the year.EPS of 23.3 pence increased 15% in CER terms
(14% in sterling terms) compared with Q2 2005. The adverse currency impact of
1% on EPS reflected exchange losses on settlement of foreign currency
balances in the quarter partly offset by a stronger dollar.

FINANCIAL REVIEW – INCOME STATEMENT

Operating profit
Q2 2006 Q2 Growth
2005
% of
% of turnove CER
£m turnover £m r % £%
––––– ––––
–––––– –––––– –––––– –––––– – –
Turnover 5,811 100.0 5,246 100.0 9 11

Cost of sales (1,209) (20.8) (1,155) (22.0) 3 5


Selling, general and
administration (1,883) (32.4) (1,681) (32.0) 8 12
Research and development (853) (14.7) (702) (13.4) 20 22
Other operating income 45 0.8 3 -
Operating profit 1,911 32.9 1,711 32.6 13 12
–––––
–––––– –––––– –––––– –––––– – ––––

4. COLGATE PAMOLIVE INDIA LIMITED

From a modest start in 1937, when hand-carts were used to distribute


Colgate Dental Cream, Colgate-Palmolive (India) today has one of the widest
distribution networks in India – a logistical marvel that spans around 3.5 million
retail outlets across the country, of which the Company services 9.40,000 outlets
directly. The Company has grown to a Rs. 9600 million plus with an outstanding
record of enhancing value for its strong shareholder base.
Colgate's tight focus in Oral Care in India while building its Personal Care
business coupled with a simple, but sound worldwide financial strategy, has
helped deliver consistent shareholder value. Colgate consistently increases
gross margin while at the same time reducing overhead expenses. The increase
in gross margin and the reduction in overhead expenses provide the money to
invest in advertising to support the launch of new products, while at the same
time increasing operating profit.
Today, Colgate is a household name in India with one out of two consumers
using a modern dentifrice. Consistently superior quality, innovation and value for
money products emerging out of advanced technology employed, has enabled
Colgate to be voted ‘The Most Trusted Brand’ in India across all brands and
categories for the third consecutive year in the Brand Equity AC Nielson ORG-
MARG 2005 survey. Colgate has been the only brand to be ranked in the top
three for all the five surveys and to hold the premier position for three
consecutive years. This is a true measure of the trust and confidence that
generations of consumers have placed in Colgate for their oral care needs.

History

1975
Caprice hair care launches in Mexico. Today, hair care products are sold in over
70 countries, with variants to suit every type of hair need.
1976
Colgate-Palmolive acquires Hill's Pet Nutrition. Today Hill's is the global leader in
pet nutrition and veterinary recommendations.
1983
Colgate Plus toothbrush is introduced. Today over 1.6 billion Colgate
toothbrushes are sold annually worldwide. If you lined them up end to end, they
would circle the globe 16 times.
1985
Protex bar soap is introduced, and today offers all-family antibacterial protection
in over 56 countries. Colgate-Palmolive enters into a joint venture with Hong
Kong-based Hawley & Hazel, a leading oral care company, which adds strength
in key Asian markets.
1986
The Chairman's You Can Make A Difference Program is launched, recognizing
innovation and executional excellence by Colgate people.
1987
Colgate acquires Softsoap liquid soap business from the Minnetonka
Corporation. Today, Colgate is the global leader in liquid hand soap.
1989
Annual Company sales surpass the $5 billion mark.
1991
Colgate acquires Murphy Oil Soap, the leading wood cleaner in the U.S. Today,
its product portfolio has expanded to include all-purpose cleaners, sprays and
wipes.
1992
Colgate acquires the Mennen Company. Today, Mennen products are sold in
over 52 countries.
1995
Colgate enters Central Europe and Russia, expanding into fast-growing markets.
Colgate acquires Kolynos Oral Care business in Latin America and launches
market-leading Sorriso toothpaste.
1996
Bright Smiles, Bright Futures oral health education program expands to reach 50
countries with in-school programs and mobile dental clinics.
1997
Colgate Total toothpaste is introduced and quickly becomes the market leader in
the U.S. Only Colgate Total, with its 12-hour protection, fights a complete range
of oral health problems.
2004
Colgate acquires the GABA oral care business in Europe, with its strength in the
important European pharmacy channel and its ties with the dental community.
2006
Today, with sales surpassing $10 billion, Colgate focuses on four core
businesses: Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate
now sells its products in 222 countries and territories worldwide.

Products

Oral Care:
• Colgate – Toothpaste, Tooth Powder, Whitening Products
• Pamolive - Shower Gel, Shower Cream, Bar Soap, Liquid Hand Wash,
Shave Preps, Skin Care
Household Care:
• Axion Surface Clean

5. BRITANIA

The story of one of India's favorite brands reads almost like a fairy tale. Once
upon a time, in 1892 to be precise, a biscuit company was started in a
nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295.
The company we all know as Britannia today.
The beginnings might have been humble-the dreams were anything but. By
1910, with the advent of electricity, Britannia mechanized its operations, and in
1921, it became the first company east of the Suez Canal to use imported gas
ovens. Britannia's business was flourishing. But, more importantly, Britannia was
acquiring a reputation for quality and value. As a result, during the tragic World
War II, the Government reposed its trust in Britannia by contracting it to supply
large quantities of "service biscuits" to the armed forces.

As time moved on, the biscuit market continued to grow and Britannia grew along
with it. In 1975, the Britannia Biscuit Company took over the distribution of
biscuits from Parry's who till now distributed Britannia biscuits in India. In the
subsequent public issue of 1978, Indian shareholding crossed 60%, firmly
establishing the Indianness of the firm. The following year, Britannia Biscuit
Company was re-christened Britannia Industries Limited (BIL). Four years later in
1983, it crossed the Rs. 100 crores revenue mark.

On the operations front, the company was making equally dynamic strides. In
1992, it celebrated its Platinum Jubilee. The Wadia Group acquired a stake in the
company and became an equal partner with Groupe Danone in Britannia. The
subsequent year saw sales cross landmark 100,000 tones of biscuits or 1 billion
packs of 100g.

Britannia strode into the 21st Century as one of India's biggest brands and the
pre-eminent food brand of the country. It was equally recognized for its innovative
approach to products and marketing: the Lagaan Match was voted India's most
successful promotional activity of the year 2001 while the delicious Britannia 50-
50 Maska-Chaska became India's most successful product launch. In 2002,
Britannia's New Business Division formed a joint venture with Fonterra, the
world's second largest Dairy Company, and Britannia New Zealand Foods Pvt.
Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global
rated Britannia 'One amongst the Top 200 Small Companies of the World', and
The Economic Times pegged Britannia India's 2nd Most Trusted Brand.

Today, more than a century after those tentative first steps, Britannia's fairy tale is
not only going strong but blazing new standards, and that miniscule initial
investment has grown by leaps and bounds to crores of rupees in wealth for
Britannia's shareholders. The company's offerings are spread across the
spectrum with products ranging from the healthy and economical Tiger biscuits to
the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the
trust of almost one-third of India's one billion population and a strong
management at the helm means Britannia will continue to dream big on its path
of innovation and quality. And millions of consumers will savour the results,
happily ever after.

1975• Britannia Biscuit Company takes over biscuit distribution


from Parry's
1979 Re-christened Britannia Industries Ltd. (BIL)

Sales cross Rs.100 crore


1983
1989• The Executive Office relocated to Bangalore
1992• BIL celebrates its Platinum Jubilee
1993• Wadia Group acquires stake in ABIL, UK and becomes an
equal partner with Groupe Danone in BIL


1997• Re-birth - new corporate identity 'Eat Healthy, Think Better'
leads to new mission: 'Make every third Indian a Britannia
consumer'

• BIL enters the dairy products market


1999• "Britannia Khao World Cup Jao" - a major success! Profit up
by 37%
2000• Forbes Global Ranking - Britannia among Top 300 small
companies
2001• BIL ranked one of India's biggest brands
• No.1 food brand of the country
• Britannia Lagaan Match: India's most successful promotional
activity of the year

• Maska Chaska: India's most successful FMCG launch


2002• BIL launches joint venture with Fonterra, the world's second
largest dairy company
• Britannia New Zealand Foods Pvt. Ltd. is born
• Rated as 'One amongst the Top 200 Small Companies of the
World' by Forbes Global
• Economic Times ranks BIL India's 2nd Most Trusted Brand

• Pure Magic -Winner of the Worldstar, Asiastar and Indiastar


award for packaging
2003• 'Treat Duet'- most successful launch of the year

• Britannia Khao World Cup Jao rocks the consumer lives yet
again
2004• Britannia accorded the status of being a 'Superbrand'
• Volumes cross 3,00,000 tons of biscuits

• Good Day adds a new variant - Choconut - in its range


2005• Re-birth of Tiger - 'Swasth Khao, Tiger Ban Jao' becomes the
popular chant!
• Britannia launched 'Greetings' range of premium assorted
gift packs
• The new plant in Uttaranchal, commissioned ahead of
schedule.

• The launch of yet another exciting snacking option - Britannia


50-50 Pepper Chakkar

PRODUCTS

• Britannia Treat proffers a wide variety of flavours, such as the classic


favourites Bourbon & Elaichi, the Fruit Flavoured Creams such as Orange,
Pineapple, Mango, and Strawberry, the Jam Filled Centres under the Jim
Jam range, and the Duet Range
• Tiger, launched in 1997, became the largest brand in Britannia's portfolio
in the very first year of its launch and continues to be so till today. Tiger
has grown from strength to strength and the re-invigoration.
• Britannia Good Day was launched in 1986 in two delectable avatars -
Good Day Cashew and Butter. Over the years, new variants were
introduced - Good Day Pista Badam in 1989, Good Day Chocochips in
2000 and Good Day Choconut in 2004.
• Britannia 50-50 is the leader in its category with more than one-third of
market share. The versatile and youthful brand constantly aims to provide
a novel and exciting taste experience to the consumer.
• Britannia's oldest brand enjoys a heritage that spans the last 50 years -
and going strong., Britannia Marie Gold has maintained its stronghold. It is
the #1 brand in its category by a long shot
• In 1996, Milk Bikis launched a variant called Milk Cream. These round
biscuits come with smiley faces and are full of milk cream that makes
them very popular with children.
• To offer something to consumers who cherish healthy living, Britannia
introduced Nutri-Choice biscuits. In 1998, Nutri-Choice Thin Arrowroot was
morphed from Jacob's Thin Arrowroot (a popular brand in East India).
• Before Timepass, Britannia's offering in the salted cracker category was
Snax. Launched in 1999, Snax was promoted as a tastier base for
toppings through edgy advertising.
• Little Hearts was launched in 1993 and targeted the growing youth
segment. A completely unique product, it was the first time biscuits were
retailed in pouch packs like potato wafers.
• Britannia Nice Time was the pioneer of sugar sprinkled biscuits in India.
This unique product managed to create such a strong consumer pull that
soon there was a rush of pretender products in the market, clearly
indicative of the success of the concept.
• Till 1958, there were no breads in the organised sector and bread
consumption was a habit typified by the British. Then, a mechanised bread
unit was set up in Delhi with the name "Delbis" which produced sliced
bread and packed it under the Britannia name. Thus, Britannia was not
only the pioneer, but also inculcated in the people of Delhi the habit of
eating white sliced bread. The Mumbai unit came up in 1963, and there
again Britannia was the first branded bread in the city.

Financial Performance

Annual Report 2004-2005


TEN YEAR FINANCIAL STATISTICS: 1996-2005

Year ended 31st March 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Assets employed
Fixed assets less depreciation 714 853 1277 1353 1306 1588 1632 1481 1283 1277
& amortisation 871 731 912 1293 1470 2156 3104 2969 2913 3300
Investments 68 78 7 18 65 257 592 747 43 (423)
Net current assets 122 163 217 260 463 342
Miscellaneous Expenditure
1653 1662 2196 2664 2963 4164 5545 5457 4702 4496

Financed by
Equity shares 186 186 186 186 279 279 269 259 251 239
Reserves & Surplus 741 838 1026 1308 1586 2123 3430 3653 4059 4196
Loan funds 726 638 984 1170 1098 1762 1846 1545 392 61
1653 1662 2196 2664 2963 4164 5545 5457 4702 4496

Profits and appropriations


Sales 6024 7523 847810301 116981332514510134911470516154
Profit before 324 368 542 735 962 1211 1463 1690 2187 2610
Depreciation,Amortisation and 54 73 118 159 172 189 240 261 224 190
tax 270 295 424 576 790 1022 1223 1429 1963 2420
Depreciation and Amortisation 19 117 1368 44 (119) (217)
Profit before tax and 270 295 424 576 771 1139 2591 1473 1844 2203
Exceptional items 110 116 135 180 261 434 559 482 656 715
Exceptional Items 160 179 289 396 510 705 2032 991 1188 1488
Profit before tax* 74 74 93 102 125 153 201 251 272 334
Taxation 7 9 11 14 16 32 35 47
Profit after tax 47 14 18
Dividends 86 98 187 283 371 489 1564 692 910 1117
Tax on dividend
Debenture Redemption
Reserve
Retained earnings

6. DABUR INDIA

Dabur India Limited is a leading Indian consumer goods company with interests
in health care, Personal care and foods. Over more than 100 years we have
been dedicated to providing nature-based solutions for a healthy and holistic
lifestyle.
Through our comprehensive range of products we touch the lives of all
consumers, in all age groups, across all social boundaries. And this legacy has
helped us develop a bond of trust with us.
1979 Sahibabad factory / Dabur Research Foundation
1986 Public Limited Company
1992 Joint venture with Agrolimen of Spain
1993 Cancer treatment
1994 Public issues
1995 Joint Ventures
1996 3 separate divisions
1997 Foods Division / Project STARS
1998 Professionals to manage the Company
2000 Turnover of Rs.1,000 crores
2003 Dabur demerges Pharma Business
2005 Dabur aquires Balsara
2006 Dabur announces Bonus after 12 years
2006 Dabur crosses $2 Bin market Cap, adopts US GAAP

Dabur Health Care Product Range

Dabur Hajmola Yumstick - Shilajit Gold -


Chyawanprash- Hajmola Mast Nature Care -
Dabur Masala - Sat Isabgol -
Chyawanshakti- Anardana - Shilajit -
Glucose D- Hajmola - Ring Ring -
Dabur Lal tail- Hajmola candy - Itch Care -
Dabur Baby olive Hajmola Candy Back-aid -
oil- Fun2 - Shankha Pushpi -
Dabur Janma Pudin hara - Dabur Balm -
Ghunti- (Liquid and Sarbyna Strong -
pearls)
Pudin hara G -
Dabur Hingoli -

Dabur Personal Care Product Range

Amla Hair Oil - - Anmol Silky Black Shampoo


Amla Lite Hair Oil - Vatika Henna
- Conditioning Shampoo
Vatika Hair Oil - - Vatika Anti-Dandruff Shampoo
Anmol Sarson - Anmol Natural Shine Shampoo
Amla -

Gulabari - - Dabur Red Gel


Vatika Fairness - Dabur Red Toothpaste
Face Pack - - Babool Toothpaste
- Meswakl Toothpaste
- Promise Toothpaste
- Dabur Lal Dant Manjan
- Dabur Binaca Toothbrush

Dabur Foods Product Range

Tastes like eating a 100% Natural Fruit Juice Pure natural Honey
fruit

Hommade - a range Lemoneez is a Natural Lemon Capsico - a fiery red-pepper


of Juice sauce.
culinary ingredients
giving you 'The taste
of Indian Kitchen'.

FINANCIAL PERFORMANCE

(Rs. in Cr.)

FMCG FMCG FMCG FMCG


(RECAST) standalon standalon
* e e standalone
02-03 03-04 04-05 05-06

1048.5 1148.0 1268.7 1369.7

4.9 11.1 11.5 5.4


109.6 136.1 187.9 243.3

80.0 113.4 165.0 214.4

72.0 101.2 148.0 189.1

2.5 3.5 5.2 3.3***

148.9 154.9 191.6 198.8

47.2 171.2 270.9 275.1

112.3 -16.9 -70.2 -22.9

28.6 28.6 28.6 57.3

196.3 240.0 309.5 390.5

222.9 262.1 332.3 415.0

81.7 39.8 48.6 20.6

7. GODFREY PHILLIPS

Godfrey Phillips is a company driven by passion - the passion to excel, innovate


and win, a passion to be the leader, to emerge as the most respected company
in the tobacco industry, not just in India but all over the world.

Godfrey Phillips is today the second largest player in the Indian cigarette industry
with an annual turnover of over US$ 265 million.

Incorporated in India in 1936, the Company established its own manufacturing


facilities in 1944. Today, the operations span the entire northern and western part
of the country, with two manufacturing facilities located in Ghaziabad (near Delhi)
and in Andheri (Mumbai), a state of the art R&D centre in Mumbai and a tobacco-
buying unit in Guntur (Andhra Pradesh). Headquartered in Delhi, the Company
has its sales offices across the country at Ahmedabad, Mumbai, Delhi,
Chandigarh and Hyderabad.

The Company today is the proud owner of some of the most popular cigarette
brands in the country like Red and White, Four Square, Jaisalmer, Cavanders,
Tipper and Prince. Its products are distributed through an extensive India wide
network comprising 484 exclusive distributors and over 800,000 retail outlets.

Over the years, Godfrey Phillips has emerged as a professionally managed,


highly efficient corporate entity. Today, the Company has one of the highest
productivity rates of workers in the entire country and an enviable organisational
structure. Over the years the Company has also become an active player in
overseas markets, with significant export volumes.

Godfrey Phillips has two major stakeholders, one of India's leading industrial
houses - the K.K. Modi Group and one of the World's largest tobacco companies,
Philip Morris. Godfrey Phillips has the strong backing of over 15,000
shareholders in the Country and is today, through the sheer determination &
passion of every employee of the organization, growing from strength to strength.

From its modest beginning in London way back in 1844, Godfrey Phillips, a major
player in the Indian tobacco industry, has come a long way.

The history of the Company reflects the strong determination and passion
amongst the founders & the employees of the Company to establish itself as a
leader of the tobacco industry in the Country.

Mr. Godfrey Phillips, founder of Godfrey Phillips & Sons commenced business in
the Barbican (London), as a Cigar manufacturer in 1844. From the Barbican he
moved to Primrose Street and after that to Commercial Street London. B.D.V, the
packet tobacco with which the name of Godfrey Phillips was intricately
connected, is practically contemporary with Mr. Phillips embarkation in tobacco
cutting in the year 1887.

At that time packet tobaccos were in their infancy. After B.D.V. came "Marigold"
and Guinea Gold. Mr. Phillips, a splendid judge of tobacco himself, looked for
appreciation of quality in his customers and stuck to his belief that quality will
ultimately determine success, something that is still the strongest belief in the
Company. Messrs Godfrey Phillips, D.H. Wilmer and H.C. Water incorporated
GODFREY PHILLIPS INDIA as a Private Ltd. Co. on 3rd December 1936. The
Company imported cigarettes from Godfrey Phillips Ltd. U.K.

In the year 1942, plans for setting up a manufacturing facility in Calcutta were
made, however it got shelved due to World War II. In 1944, after the war,
GODFREY PHILLIPS bought Master Tobacco Co., Chakala, Andheri (Mumbai)
thereby establishing its first factory in the Country. In October 1946, GODFREY
PHILLIPS became a Public Ltd. Co. with its manufacturing operations in Mumbai.

GODFREY PHILLIPS was then primarily a manufacturing company and made


cigarette brands like Cavanders, Abdulla No. 7, DERESKE, Marcovich, Red &
White. In 1951/52 Godfrey Phillips UK bought out George Dobie & Son's, famous
Four Square brand.

In 1967, D. Macropolo & Co., which was the sole selling agent for GODFREY
PHILLIPS, opened a subsidiary company called "International Tobacco Co.", with
its manufacturing facility in Ghaziabad (near Delhi) to manufacture cigarettes for
GODFREY PHILLIPS.

In 1967-68, Philip Morris acquired substantial holding in Godfrey Phillips Ltd.,


U.K. and Godfrey Phillips Investment Corporation which was holding substantial
shares of Godfrey Phillips India Ltd. It also acquired a large share holding
interest in George Dobie & Sons. Thus in 1968, Godfrey Phillips Ltd., U.K.,
George Dobie & Sons, and GODFREY PHILLIPS became affiliates of Philip
Morris.

Philip Morris is a large professionally managed multinational with diversified


business interests. It has a wide range of tobacco and other products, with
"Marlboro" being its leading brand in the world. It took major initiatives in 1968 for
GODFREY PHILLIPS to re-organise its operations. A major thrust was given to
marketing & sales and it was decided to merge D. Marcopolo & Co. with Godfrey
Phillips, a process, which began in 1969. The merger was finally completed on
31st December 1975, bringing the four sales branches and "International
Tobacco Co." under its fold.

In 1973 GODFREY PHILLIPS, successfully launched Four Square Kings, India 's
first King Size filter cigarette. It was the sheer passion to be close to the
consumer that helped the Company recognize the demands of the emerging
consumer long before anyone in the cigarette industry.

In 1979, Philip Morris. joined hands with the K.K. Modi Group and in the
following year the Modi Enterprises took over the management of GODFREY
PHILLIPS with a substantial financial stake. Modi enterprise was new to the
cigarette business, but an area in which they saw a huge potential for growth.
They took on this new challenge with a lot of passion, vigour and confidence.

The business was given a fresh look in all its areas of operation. Professional
managers were inducted to head the various functions to bring about change and
vigor in the organization to meet the challenges of the eighties. The existing
brand franchises were rejuvenated, each brand was modernized with the prime
objective of growing their brand equity. Modernization of the factories was
initiated; product development and research activities were stepped up.
Aggressive marketing and sales strategies were drawn up and implemented and
each employee was empowered to bring about the desired change. Everything
was restarted with renewed passion and determination.

Godfrey Phillips is best known by the brands it manufactures and today the
Company is the proud owner of some of the best FMCG brands of the country. At
least 3 of our cigarette brands today feature in the top 50 FMCG list. They are:
Four Square Special, Red & White and Cavanders.

Apart from these champions, the Company also has other cigarette brands that
cater to a large and varied range of consumer segments.

The year 2002 also saw the Company re-launch some of its brands, by giving
them an entirely new look & positioning, while some new, innovative products
were also introduced. These brands are already making their presence felt in the
industry. They are: Jaisalmer (re-launched in 2003), Tipper & Piper (new
innovative products introduced in 2002) and Prince (another re-launch for the
year 2002).

Prepared with utmost dedication and passion, to deliver the customer with the
most satisfying smoke, each cigarette going out into the market bears the
Godfrey Phillips stamp of quality and assurance.

Cigarette

• Four Square
• Jaisalmer
• Red & White
• Cavanders
• Tipper
• North Pole
• Prince

Cigars - Brands

• Don Diego
• Hav-a-tampa
• Phillies
• Santa Damiana H-2000 Rothschild
8. GODREJ

The foods division of Godrej Industries produces and markets edible oils,
vanaspati, fruit drinks, fruit nectar and bakery fats.

The division has two state-of-the-art manufacturing facilities: at Wadala in


Mumbai, the capital of the western Indian state of Maharashtra; and at
Mandideep near Bhopal in the northern Indian state of Madhya Pradesh. It has a
national distribution network consisting of 800 distributors and 24 consignment
agents.The plants are equipped with the best of modern equipment for the
processing and packaging of a wide variety of food products. These include:
The 'Jumpin' range of fruit drinks, which come in flavors such as mango, apple,
pineapple and orange. The 'Xs' range of fruit nectar (mango, litchi, and sweet
orange and pineapple flavors). Tomato Puree (under the Godrej brand). Fruit
pulps and juices in bulk aseptic packaging. Health and dietetic foods. Refined
edible oils of low color in different varieties of groundnut, sunflower and
soyabean. Processed hydrogenated fats for edible purposes such as vanaspati
and bakery shortenings.

Godrej Industries, in keeping with the philosophy of the Godrej Group, believes
that quality is the product of a combination of man and machine. The foods
division has people of outstanding caliber to go with the modern technologies it
uses. The result: the ability to deliver outstanding products.

Soymilk is the rich creamy milk of whole soybeans. With its unique nutty flavor
and rich nutrition, soymilk can be used in a variety of ways.

Plain, unfortified soymilk is an excellent source of high-quality protein, B-vitamins


and iron. Some brands of soymilk are fortified with vitamins and minerals and are
good sources of calcium, vitamin D and vitamin B-12.

Soymilk is free of the milk sugar lactose and is a good choice for people who are
lactose intolerant. Also, it is a good alternative for those who are allergic to cow's
milk. Children can enjoy homemade or commercially prepared soymilk after the
age of 1 year. Infants under 1 year of age should be fed breast milk,
commercially prepared infant formula or commercial soymilk infant formula.

Soymilk is available as a plain, unflavored beverage or in a variety of flavors


including apple, mango, malt and plain. Soymilk can be used in almost any way
that cow's milk is used.

Godrej Industries Limited is India's leading manufacturer of oleochemicals and


makes more than a hundred chemicals for use in over two dozen industries. It
also manufactures edible oils, vanaspati and bakery fats. Besides, it operates
businesses in medical diagnostics and real estate.
GIL is a member of the Godrej Group, which was established in 1897 and has
since grown into a Rs 6,000 crore conglomerate. The company was called
Godrej Soaps Limited until March 31, 2001. Thereafter, the consumer products
division got de-merged into Godrej Consumer Products Limited, and the residual
Godrej Soaps became Godrej Industries Limited. This led to the formation of two
separate corporate entities: Godrej Consumer Products and Godrej Industries.
Besides its three businesses, Godrej Industries also runs four divisions —
Corporate Finance, Corporate HR, Corporate Audit and Assurance and Research
and Development — which operate on behalf of the entire Godrej Group.
GIL has built a strong manufacturing base capable of delivering international
quality products at competitive prices. It operates two plants, one at Valia in the
Indian state of Gujarat and a second at Vikhroli in suburban Mumbai. The
company's products are exported to 40 countries in North and South America,
Asia, Europe, Australia and Africa, and it leads the Indian market in the
production of fatty acids, fatty alcohols and AOS

9. NIRMA

Nirma is one of the few names - which is instantly recognized as a true Indian
brand, which took on mighty multinationals and rewrote the marketing rules to
win the heart of princess, i.e. the consumer.

Nirma, the proverbial ‘Rags to Riches’ saga of Dr. Karsanbhai Patel, is a classic
example of the success of Indian entrepreneurship in the face of stiff competition.
Starting as a one-man operation in 1969, today, it has about 14, 000 employee-
base and annual turnover is above Rs. 25, 00 crores.

India is a one of the largest consumer economy, with burgeoning middle class
pie. In such a widespread, diverse marketplace, Nirma aptly concentrated all its
efforts towards creating and building a strong consumer preference towards its
‘value-for-money’ products.
It was way back in ‘60s and ‘70s, where the domestic detergent market had only
premium segment, with very few players and was dominated by MNCs. It was
1969, when Karsanbhai Patel started door-to-door selling of his detergent
powder, priced
at an astonishing Rs. 3 per kg, when the available cheapest brand in the market
was
Rs. 13 per kg. It was really an innovative, quality product – with indigenous
process, packaging and low-profiled marketing, which changed the habit of
Indian housewives’ for washing their clothes. In a short span, Nirma created an
entirely new market segment in domestic marketplace, which is, eventually the
largest consumer pocket
and quickly emerged as dominating market player – a position it has never since
relinquished. Rewriting the marketing rules, Nirma became a one of the widely
discussed success stories between the four-walls of the B-school classrooms
across
the world.

The performance of Nirma during the decade of 1980s has been labeled as
‘Marketing Miracle’ of an era. During this period, the brand surged well ahead its
nearest rival – Surf, which was well-established detergent product by Hindustan
Lever. It was a severing battering for MNC as it recorded a sharp drop in its
market share. Nirma literally captured the market share by offering value-based
marketing mix of four P’s, i.e. a perfect match of product, price, place and
promotion.

Now, the year 2004 sees Nirma’s annual sales touch 800,000 tones, making it
one of
the largest volume sales with a single brand name in the world. Looking at the
FMCG synergies, Nirma stepped into toilet soaps relatively late in 1990 but this
did not deter it to achieve a volume of 100,000 per annum. This makes Nirma the
largest detergent and the second largest toilet soap brand in India with market
share of 38% and 20% respectively.

It has been persistent effort of Nirma to make consumer products available to


masses at an affordable price. Hence, it takes utmost care to provide finest
products at the most affordable prices. To leverage this effort, Nirma has gone for
massive backward

integration along with expansion and modernization of the manufacturing


facilities.
The focal objective behind modernization plan is of up gradation with resource-
savvy technology to optimize capabilities. Nirma’s six production facilities,
located at different places, are well equipped with state-of-art technologies. To
ensure regular supply of major raw materials, Nirma had opted for backward
integration strategies. These strategic moves allowed Nirma to manage effective
and efficient supply-chain.
Nirma has always been practiced ‘value-for-money’ plank. Nirma plans to extend
the same philosophy in categories as commodity food products, personal care
products and packaged food. Distinct market vision and robust infrastructure
allowed Nirma to have cost leadership. Apart from this, lean distribution network,
umbrella branding and low profile media promotions allowed it to offer quality
products, at affordable prices.

In present scenario, an inspiring 59-year-old persona, Dr. Karsanbhai K. Patel,


leads Nirma, playing role of key strategic decision-maker, whereas his next
generation has already skilled management capabilities. Shri Rakesh K Patel – a
qualified management graduate, is spearheading the procurement, production
and logistic functions, whereas Shri Hiren K Patel – a qualified Chemical
engineer and management graduate, heads the marketing and finance functions
of the organization. Shri Kalpesh Patel, Executive Director, leads the professional
organizational structure.

Products

• Nirma Bath Soap


• Nirma Beauty Soap
• Nirma Lime Fresh Soap
• Nima Rose
• Nima Sandal
• Nirma Washing Powder
• Nirma Detergent Cake
• Super Nirma Washing Powder
• Super Nirma Detergent Cake
• Nirma Popular Detergent Powder
• Nirma Popular Detergent Cake
• Nirma Shudh Iodized Salt
• Nirma Clean Dish Wash Bar
• Nima Bartan Bar
10. ITC

ITC is one of India's foremost private sector companies with a market


capitalization of over US $ 13 billion and a turnover of US $ 3.5 billion. Rated
among the World's Best Big Companies by Forbes magazine and among India's
Most Respected Companies by Business World, ITC ranks third in pre-tax profit
among India's private sector corporations.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty


Papers, Packaging, Agri-Business, Packaged Foods & Confectionery,
Information Technology, Branded Apparel, Greeting Cards, Safety Matches and
other FMCG products. While ITC is an outstanding market leader in its traditional
businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is
rapidly gaining market share even in its nascent businesses of Packaged Foods
& Confectionery, Branded Apparel and Greeting Cards.
As one of India's most valuable and respected corporations, ITC is widely
perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this
source of inspiration "a commitment beyond the market". In his own words: "ITC
believes that its aspiration to create enduring value for the nation provides the
motive force to sustain growing shareholder value. ITC practices this philosophy
by not only driving each of its businesses towards international competitiveness
but by also consciously contributing to enhancing the competitiveness of the
larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating
multiple drivers of growth anchored on its time-tested core competencies:
unmatched distribution reach, superior brand-building capabilities, effective
supply chain management and acknowledged service skills in hoteliering. Over
time, the strategic forays into new businesses are expected to garner a
significant share of these emerging high-growth markets in India.

Products

• Cigarettes

ITC is the market leader in cigarettes in India. With its wide range of
invaluable brands, it has a leadership position in every segment of the market. Its
highly popular portfolio of brands includes Wills, Insignia, India Kings,
Gold Flake, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake.

• Foods

ITC made its entry into the branded & packaged Foods business in August
2001 with the launch of the Kitchens of India brand. A more broad-based entry
has been made since June 2002 with brand launches in the Confectionery,
Staples and Snack Foods segments.
The packaged foods business is an ideal avenue to leverage ITC's proven
strengths in the areas of hospitality and branded cuisine, contemporary
packaging and sourcing of agricultural commodities. ITC's world famous
restaurants like the Bukhara and the Dum Pukht, nurtured by the Company's
Hotels business, demonstrate that ITC has a deep understanding of the Indian
palate and the expertise required to translate this knowledge into delightful dining
experiences for the consumer.
The Foods business is today represented in 4 categories in the market.
These are:

• Ready To Eat Foods


• Staples
• Confectionery
• Snack Foods

• Lifestyle Retailing

Over the last six years, ITC's Lifestyle Retailing Business Division has
established a nationwide retailing presence through its Wills Lifestyle chain of
exclusive specialty stores. Beginning with its initial offering of Wills Sport
relaxed wear from the first store at South Extension, New Delhi in July 2000,
it has expanded its basket of offerings to the premium consumer with Wills
Classic work wear, Wills Clublife evening wear and a tempting range of
designer accessories that complete the Look.

• Greeting, Gifting & Stationery

ITC's stationery brands Paper Kraft & Classmate are the most widely
distributed brands across India. ITC's Greeting & Gifting products include
Expressions greeting cards and gifting products like autograph books, slam
books, party invitations, pop up & mini books. The business also markets
Expressions Regalia, a collection of premium greeting cards & social cause
cards & desk calendars in association with SOS Children's Villages of India.
Expressions greetings & gifting products are available in multi brand retail outlets
across India.
(Rs. in Crores)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
GROSS
5188 5991 6924 7701 8069 8827 9982 11194 12040 13585
INCOME
Excise Duties
2580 3078 3694 4063 4134 4475 4781 5159 5345 5710
etc.
Net Income 2608 2913 3230 3638 3935 4353 5202 6035 6695 7875
Cost of Sales 2024 2143 2271 2443 2475 2516 3156 3712 4110 4847
PBDIT 584 770 958 1194 1460 1836 2046 2323 2585 3028
PBDT 500 650 877 1040 1347 1740 1979 2294 2561 2986
Depreciation 48 63 86 102 119 140 198 237 242 313
PBIT 536 707 873 1092 1342 1696 1847 2086 2344 2716
PROFIT
452 587 791 938 1229 1600 1780 2056 2319 2673
BEFORE TAX
Tax 191 240 265 315 437 594 591 685 726 836
PROFIT
AFTER TAX
BEFORE 261 347 526 623 792 1006 1190 1371 1593 1837
EXCEPTIONAL
ITEMS
EXCEPTIONAL
ITEMS (NET 354
OF TAX)
PROFIT
AFTER 261 347 526 623 792 1006 1190 1371 1593 2191
TAXATION
Dividends 61 108* 121* 150* 225* 270* 334 419* 559* 882*
Retained Profits 200 239 405 474 568 736 856 953 1034 1310
Earnings Per Share on profit after tax before exceptional items
Basic (Rs.) 10.64 14.14 21.44 25.40 32.29 41.00 48.07 55.41 64.34 73.74
Adjusted @
34.05 45.25 68.61 81.28 103.33 131.20 155.14 178.81 207.69 239.54
(Rs.)
Earnings Per Share on profit after taxation
Basic (Rs.) 10.64 14.14 21.44 25.40 32.29 41.00 48.07 55.41 64.34 87.97
Adjusted @
34.05 45.25 68.61 81.28 103.33 131.20 155.14 178.81 207.69 285.74
(Rs.)
Dividend Per
2.50 4.00 4.50 5.50 7.50 10.00 13.50 15.00 20.00 31.00
Share (Rs.)
Market
5571 8792 17523 23633 18038 19987 17243 15581 25793 33433
Capitalisation **
Foreign
Exchange 619 635 759 650 688 697 948 1294 1078 1269
Earnings
An
Assignment
on
FMCG Industry
Submitted By:

Shivani Mohan E32


Nipun Bhalla E18
Ayu Bhatia E64
Abhishek Arora E01
Akansha Aggarwal E03