Hindustan Latex Ltd is close to finalising exports of its condom brand Moods to top US retailer Wal-Mart. The public sector company hopes to be in the US and European markets with Moods by mid-2005, having launched the contraceptive in Russia last month.
Hindustan Latex director KK Suresh Kumar told FE that the company’s distributor in the US was extending Moods to Wal-Mart. “We will be targeting non-subsidy markets with our brand Moods. There has been good response from Russia and the Middle East markets, and now we have tied up with distributors in countries like the UK, US, France, Switzerland, Spain, Canada and South Africa.”
Condoms, which account for three-fourth of Hindustan Latex’s turnover, is now expected to bolster the company’s exports appeal. Exports accounted for a fifth of the company’s turnover of Rs 165 crore in 2003—04 but the contribution of condoms has so far been minimal.
Mr Kumar said that the company was developing export market in preparation for maximum utilisation of its expanded capacity as well as better margins.
“In the US, a single Moods unit will retail at $1 whereas in India a buyer gets nine units for the same price,” Mr Kumar said. “We are adding 230 million units to our current annual capacity of 930 million condom pieces. A good part of this will be sold in the non-governmental retail as well as foreign markets.”
As for the capex for the proposed expansion, the company is weighing options whether to opt for imports of machinery or rely on existing in-house engineering to create new capacity.
“We hope to operationalise the expanded plant by May 2006,” said Mr Kumar. The company is also looking at presence in the female condom market. The company will launch a new female condom brand ‘Confidom’ (to be imported from the UK) in the retail market in March 2005.
Hindustan Latex is aiming at 25% growth in condom retail sales (non-governmental) in 2004-05 over its sales of 60 million pieces last year.