Marico Industries has announced post tax profit growth of 39% for H1 2001, from US$3.85m to US$5.34m. Over the last decade, Marico has annually experienced compound growth of 28% on profits, and 22% on sales.

A 9% growth in volume last year cancelled out the deflation in selling prices caused by a general recession in the vegetable oil market. Sales, meanwhile, grew marginally by 1%, to US$66.9m. With the phenomenal drop in the cost of raw materials, from US$41.6m to US$32.8m, and lower income tax, profits after tax rose 39% to US$5.34m.

Focus on building brands

Marico increased spending on advertising and sales promotion by 51%, focusing on building brand names for new products such as Saffola Kardi-Corn Blend and Parachute Dandruff Solution.

Increased market shares

These brands, together with six others, Sweekar, Marico's Hair & Care, Revive, Sil, Oil of Malabar and Mediker, were purchased for Rs 30 crore from group company Bombay Oil, which previously leased the brands to Marico for royalty fees.

The deals have provided a sharp increase in terms of presence on the domestic market. Marico now controls 53.7% of the coconut oil market, and 8.1% of value added coconut oils. It also provides the only anti-lice shampoo and owns 12.7% of the jam market. There are also plans to build a wholly owned subsidiary in Sri Lanka to supplement its Bangladesh operations.

By Navroz Havewala