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Dabur creates new healthcare division; eyes acquisitions

13-November-2004
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Dabur creates new healthcare division; eyes acquisitions

Dabur India Ltd (DIL) has decided to undertake another restructuring, aimed at enhancing itsfocus on healthcare.

The company has created a new division - Consumer Healthcare Division (CHD) - separate from the fast moving consumer goods (FMCG) business and now looks to foray into several new products via the new division.

This restructuring follows close on the heels of DIL demerging the pharmaceuticals business into a separate company, and the CHD is expected to become fully functional by March next year.

This division will look after the prescription-based Ayurvedic medicines under DIL's fold and over-the-counter (OTC) products that the company wants to increasingly enter into.

Traditionally a business with low growth prospects, CHD is worth Rs 120 crore.

"We realised that unless CHD was created as a separate division, it might suffer from lack of focus if clubbed with the FMCG business, which would now come under the Consumer Care Division (CCD). Though it is a slow growth business with just about 2-3 per cent growth year-on-year, we expect this business to double within the next three years," the Chief Executive Officer of DIL, Mr Sunil Duggal, told Business Line.

He said the company has decided to put OTC products under the newly created division to give it the necessary impetus.

Some of the well-known brands that DIL has in the OTC category are the recently acquired cough and cold formulation Honitus, an isabgol called Naturecure and memory enhancer Shankhpushpi.

Mr Duggal said having realised the vast growth potential of the OTC market, DIL has decided to enter into several new OTC products including pain relief, stress management, cold relief products and even antacids.

"We are open to both acquiring existing brands in these categories and launching our own formulations. In fact, test marketing for some of these categories is already on," he said while declining to divulge further details.

DIL has said it has Rs 200 crore in ready cash for acquisitions and is in talks with some domestic companies for acquiring brands that are synergistic with its existing product portfolio.

Thus, after CHD is fully functional, the structure of the Dabur Group will look somewhat like this: a flagship company DIL with 100 per cent subsidiary companies Dabur Pharma Ltd, Dabur Foods Ltd and Dabur International Ltd. DIL will have the CCD and CHD divisions.

Dabur International has joint venture companies in Nigeria, Bangladesh and Egypt within its fold.

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