The Godrej group is working on a major portfolio management exercise for the Godrej Soaps consumer products division, which could involve scrapping certain brands or brand variants.
The consumer products division, which will become the demerged entity (Godrej Consumer Products (GCPL)) by April 2001, is in the process of reducing its number of stock keeping units (SKUs). At present the sales people handle about 65 SKUs (it is defined by the brand, its size and variants, a Cinthol 75 gms is one SKU). With the portfolio management exercise, the number of SKUs is expected to be not more than 50. What this would mean is that certain brands or certain sizes or variants of brands which do not contribute significantly to the bottomline will be phased out.
The company is in the process of carrying out the portfolio management exercise, results of which are expected in the next six months. Even as the company has made it clear that it will look at soaps at every range, its focus brands have been identified as Cinthol and Fairglow.
While Cinthol is a Rs 150 crore brand, Fairglow in one year of operations has touched sales of Rs 77 crore, analysts believe that as result of the rationalising exercise, brands like Marvel and Evita could be phased out. At the same time, Crowning Glory, the brand concentrated in certain regions, could become a regional brand.
Godrej expects the consumer products division to close at Rs 500 crore for March 2001. It has already achieved sales of Rs 382 crore for the six month period ended September 2000.
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