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India emerges as major FMCG sourcing hub

10-May-2004
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India emerges as major FMCG sourcing hub

If you are one of those compulsive buyers who hit the malls abroad to bring back toiletries, here’s some well-meaning advice. The soaps, skin and oral care products that you pick up from the Wal-Marts and 7-elevens of the world could very well trace their origin to Indian shores.

The Indian BPO sector may have made outsourcing a ‘forbidden’ word, but in FMCG parlance it still means prudent business. Biggies like Unilever, Procter & Gamble, Colgate-Palmolive have acknowledged Indian strength as a sourcing base.

Hindustan Lever Ltd is India’s largest exporter of branded fast moving consumer goods. Sample this: In 2003, HLL’s FMCG exports jumped 114% to hit a turnover of Rs 1,246 crore. While the Indian arm exports Lux, Lifebuoy, Fair & Lovely, Dove, Vaseline, Close-Up, Pepsodent and Signal, it’s the only source of Pears soap across the world.

“HLL has a dedicated facility in the Kandla exports processing zone for the home and personal care exports. Pears soap is manufactured at the Khamgaon facility in Maharashtra,” said the HLL spokesperson.

The $43 billion Procter & Gamble of US is sourcing over Rs 375 crore worth of products and services from India. The company’s sourcing strategy is two-pronged — in addition to sourcing raw material and products for the parent company, India has also become an integral part of P&G’s R&D initiative under the Connect+Develop strategy.

P&G vice president R&D Larry Huston, during his recent India visit said: “We believe India can play a key role in the Connect+Develop strategy. We are conducting this visit to get a better understanding of the fit that exists between our needs for cooked products, packaging, tech, processes, commercial connections and Indian capabilities.” The firm has been sourcing some of the products under the billion-dollar Vicks brand and Psyllium (Isabgol) from India.

Picking up a leaf from its competitors’ book, Colgate-Palmolive has also started taking India seriously as a sourcing hub. Speaking at a consumer analyst group recently, Colgate-Palmolive executive vice president Ian Cook said: “We are building a new toothpaste factory in India which is allowing us to consolidate two facilities into one,” referring to the facility in Himachal being set up with an investment of Rs 50 crore.

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