With the recent acquisition of Balsara's oral care brands, Dabur India Ltd appears to be in a dilemma over Binaca.
The brand, which was acquired from Reckitt Benckiser in 1996, appears to have become redundant for Dabur after the Balsara acquisition. And company sources indicate that Dabur might be once again keen to sell off Binaca.
But this is not the first time that the company appears to be at the crossroads over Binaca. Ever since the brand was acquired, various efforts to sell it and then to launch a herbal toothpaste under it have not fructified, company sources said. In 2002, Dabur decided to sell this brand and even appointed management consultant PricewaterhouseCoopers to seal the deal. After about two years of unsuccessful attempts, last summer the company reversed its stand to declare that it will launch a herbal toothpaste under Binaca.
But after the Balsara acquisition announced last month, Dabur has got a foothold at every price point in the oral care market. Its existing brands include Dabur Red toothpowder and toothpaste, Dabur Red Gel paste and Dabur Herbal Toothpaste; and new additions through Balsara acquisition are Promise, Babool and Meswak toothpastes. So, a hunt is again on for a buyer for Binaca.
In the latest investors' conference, the Chief Executive Officer, Mr Sunil Duggal, said, "The fact is it (Binaca) is not a strategic brand that had a role to play in the earlier scheme and now we have the Balsara brands which will enable us to have the portfolio (comprehensive oral care). This will enable us, like I said, a complete range of offering in oral care, so the role of Binaca which was not there earlier will not be there now also."
Company sources said that about three years ago Dabur had launched a toothpowder under Binaca. Though well received by consumers, trade margins remained low and the brand was withdrawn within a year of its launch. They said the company is not in negotiations with any buyer for the brand at present, but would like to sell it only at the "correct" price, adding the brand was acquired for a rather insignificant sum.
At present, the company sells toothbrushes under Binaca. According to market estimates, close to half of the Rs 2,000-crore toothpaste market rests with Colgate, followed by Hindustan Lever Ltd with 25 per cent share but Dabur has only 2 per cent share. However, it holds sway over 10 per cent of the Rs 500-crore toothpowder market.