A Study on

EMAMI INDIA
A Mini Project Submitted toDepartment of Management partial fulfilment
of the requirements for the award Science in of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by
V.PRASANTHI
(Reg. No: 18K61E000078 )

Under the Guidance of

Shri. N.VENKAT
Asst. prof

Department of Management Science

 DEPARTMENT OF MANAGEMENT SCIENCE

CERTIFICATE

This is to certify that the Mini project titled, A Study on “EMAMI INDIA”
submitted by V.PRASANTHI, Reg. No.18K61E000078 is examined and
adjudged sufficient as partial fulfilment for the award of the Master of Business
Administration, by Jawaharlal Nehru Technological University, Kakinada from
SASI INSTITUTE OF TECHNOLOGY & ENGINEERING
(AUTONOMOUS), Tadepalligudem.

PROJECT GUIDE HEAD OF THE DEPARTMENT

 Table of contents

S No Details of the Chapter Page No.

Chapter – I

 Introduction
 Need for the study
 Objectives of the study
1  Scope of the study
 Research methodology of the study
 Limitations of the study

Chapter – II

2  Industry Profile

Chapter – III

3  Company Profile

Chapter – IV

 Marketing Strategies
 HR Strategies
 Finance Strategies
4  Others
 SWOT Analysis

Chapter – V

 Findings
 Suggestions
5
 Conclusion

Bibliography
 I. CHAPTER

INTRODUCTION TO COMPANY

 Introduction
 Marketing
 Finance
 Production
 Human resource

 Need for the study

 Scope for the study
 Objectives of the study
 Methodology of the study
 CHAPTER-1

INTRODUCTION TO MARKETING
What is marketing

Marketing is the science and art of exploring, creating, and delivering value to satisfy the
needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It
defines measures and quantifies the size of the identified market and the profit potential. It
pinpoints which segments the company is capable of serving best and it designs and promotes
the appropriate products and services.

Marketing is often performed by a department within the organization. This is both good and
bad. It’s good because it unites a group of trained people who focus on the marketing task.
It’s bad because marketing activities should not be carried out in a single department but they
should be manifest in all the activities of the organization.

Definition of marketing
Marketing is defined by the American Marketing Association as "the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large.The term developed from
the original meaning which referred literally to going to market with goods for sale. From
a sales process engineering perspective, marketing is "a set of processes that are
interconnected and interdependent with other functions" of a business aimed at achieving
customer interest and satisfaction.

Importance of marketing

Marketing is a very important aspect in business since it contributes greatly to the success of
the organization. Production and distribution depend largely on marketing. Many people
think that sales and marketing are basically the same. These two concepts are different in
many aspects. Marketing covers advertising, promotions, public relations, and sales. It is the
process of introducing and promoting the product or service into the market and encourages
sales from the buying public. Sales refer to the act of buying or the actual transaction of
customers purchasing the product or service.
Since the goal of marketing is to make the product or service widely known and recognized
to the market, marketers must be creative in their marketing activities. In this competitive
nature of many businesses, getting the product noticed is not that easy.

Strategically, the business must be centered on the customers more than the products.
Although good and quality products are also essential, the buying public still has their
personal preferences. If you target more of their needs, they will come back again and again
and even bring along recruits. If you push more on the product and disregard their wants and
the benefits they can get, you will lose your customers in no time. The sad thing is that
getting them back is the hardest part.
INTROUCTION TO FINANCE

What is finance

Finance may be defined as the art and science of managing money. It includes financial
service and financial instruments. Finance also is referred as the provision of money at the
time when it is needed. Finance function is the procurement of funds and their effective
utilization in business concerns. The concept of finance includes capital, funds, money, and
amount. But each word is having unique meaning. Studying and understanding the concept of
finance become an important part of the business concern.

Definitions of finance

According to Khan and Jain, “Finance is the art and science of managing money”. 2 Financial
Management According to Oxford dictionary, the word ‘finance’ connotes ‘management of
money’. Webster’s Ninth New Collegiate Dictionary defines finance as “the Science on study
of the management of funds’ and the management of fund as the system that includes the
circulation of money, the granting of credit, the making of investments, and the provision of
banking facilities.

Importance of finance

Financial management is one of the important parts of overall management, which is directly

Related with various functional departments like personnel, marketing and production.

Financial management covers wide area with multidimensional approaches. The following

are the important scope of financial management.

1. Financial Management and Economics

Economic concepts like micro and macroeconomics are directly applied with the

financial management approaches. Investment decisions, micro and macro

environmental factors are closely associated with the functions of financial manager.

2. Financial Management and Accounting

Accounting records includes the financial information of the business concern.

Hence, we can easily understand the relationship between the financial management

and accounting. In the olden periods, both financial management and accounting

are treated as a same discipline and then it has been merged as Management

Accounting because this part is very much helpful to finance manager to take

decisions. But nowaday’s financial management and accounting discipline are

separate and interrelated.

3. Financial Management or Mathematics

Modern approaches of the financial management applied large number of

Mathematical and statistical tools and techniques. They are also called as

Econometrics.

4. Financial Management and Production Management

Production management is the operational part of the business concern, which

helps to multiple the money into profit. Profit of the concern depends upon the

production performance. Production performance needs finance, because

Production department requires raw material, machinery, wages, operating expenses.

5. Financial Management and Marketing

Produced goods are sold in the market with innovative and modern approaches.

For this, the marketing department needs finance to meet their requirements.

6. Financial Management and Human Resource

Financial management is also related with human resource department, which

provides manpower to all the functional areas of the management.

INTRODUCTION TO PRODUCTION

What is production

Production is a process of transforming (converting) inputs (raw-materials) into outputs

(finished goods). So, production means the creation of goods and services. It is done to
satisfy human wants. Thus, production is a process of transformation.

Definitions of production

According to Bates and Parkinson:“Production is the organized activity of transforming

resources into finished products in the form of goods and services; the objective of
production is to satisfy the demand for such transformed resources”.

According to J. R. Hicks: Production is any activity directed to the satisfaction of other

peoples’ wants through exchange”. This definition makes it clear that, in economics, we do
not treat the mere making of things as production. What is made must be designed to satisfy
wants.
Importance of production

Successful organizations have well defined and efficient line function and support function.
Production comes under the category of line function which directly affects customer
experience and there by future of organization itself.

Aim of production function is to add value to product or service which will create a strong
and long lasting customer relationship or association. And this can be achieved by healthy
and productive association between Marketing and Production people. Marketing function
people are frontline representative of the company and provide insights to real product needs
of customers.

An effective planning and control on production parameters to achieve or create value for
customers is called production management.

Production management refers to the application of management principles to the production

function in a factory. In other words, production management involves application of
planning,organizing, directing and controlling to the production process.
The application of the management to the field of the production has been the result of at
least three developments. First is the development of factory system of production. until the
emergence of the concept of the manufacturing , there was no such things as management as
we know it .it is true that people operated business of one type or another , but for the most
part , these people were owners of business and did not regard themselves as manager as
well.
INTRODUCTION TO HUMAN RESOURCE

What is human resource

Human Resource refer to the individuals or personnel or workforce within an organisation

responsible for performing the tasks given to them for the purpose of achievement of goals
and objectives of the organisation which is possible only through proper recruitment and
selection, providing proper orientation an induction, training, skill developments, proper
assessment of employees (performance appraisal), providing appropriate compensation and
benefits, maintaining proper labour relations and ultimately maintaining safety, welfare and
health concern of employees, which is process of the human resource management.

Definitions of human resource

Edwin Flippo defines- Human Resource Management as “planning, organizing, directing,

controlling of procurement, development, compensation, integration, maintenance and
separation of human resources to the end that individual, organizational and social objectives
are achieved.”

Importance of human resource

Behind production of every product or service there is a human mind, effort and man hours
(working hours). No product or service can be produced without help of human being.
Human being is fundamental resource for making or construction of anything. Every
organisation desire is to have skilled and competentt people to make their organisation
competent and best.

Among the five Ms of management, i.e., men, money, machines, materials, and methods,
HRM deals about the first M, which is men. It is believed that in the five Ms, "men" is not so
easy to manage. "every man is different from other" and they are totally different from the
other Ms in the sense that men possess the power to manipulate the other Ms. Whereas, the
other Ms are either lifeless or abstract and as such, do not have the power to think and decide
what is good for them.
 NEED FOR THE STUDY

The need of the study is to analyse the situation of the industry and the study gives clear cut
information about the company regarding finance, marketing, and human resources strategies
to improve the grey areas of the organization along with the industry. This study also helps to
find out SWOT analysis to meet the requirements.
 SCOPE OF THE STUDY

The study is being conducted on Emami Limited. This study tells us an over view of
Organisation. The study based on the relevant literature and material from the various
internet databases. It is also help to analyse present and future trend along with the industry
market size, market products and impact on company. The scope of the study it also includes
the social corporate responsibility of the company, financial position, available products and
management system of the company.
 OBJECTIVES OF THE STUDY

 To know about the company position in the Indian market.

 To understand the profitability position of the company.

 The primary objective of the study to evaluate the financial effieciency of “Emami
Limited”.

 To know the marketing mix, product mix & service mix of the organisation.

 To critical analyzation for customer extraction,human resource,financing of the firm

 To give concrete suggestions for improvement of the company performance.

 To assess the factors influencing the financial position of the firm.

 METHODOLOGY OF THE STUDY

After identifying the research objectives the next step is to identify the methodology for data
collection for the successful completion of the project, the study is based on the secondary
data.

 The study was conducted based on the secondary sources of data collection.

 All the percentage and figure related to the company are gathered through secondary
source like different website portals.

 The analyse the data we use both qualitative and quantitative tool like SWOT analysis

 The collection of the data mainly through internet websites.

 Annual report

 Indian brand equity foundation

 English Daily newspaper

 Find other sources.

 LIMITATIONS OF THE STUDY

It is the best to report with complete frankness flows in the process adopted because
imperfection may have little effect on the validity and reliability of the data, which may in
validate the data entirely.

 The data was available for the company analysis was gathered only through
secondary sources and calculation was made certain assumption.
 In the financial statistical data is collected from secondary source and hence the
validity may be subjected to certain errors.
 The recommendations and comments are made with a view of ideal conditions but
actual at same situations need not be ideal.
 Time is limited and information is also limited
 II CHAPTER

FAST MOVING CONSUMER GOODS (F.M.C.G.)

INDUSTRY PROFILE

 History of F.M.C.G. in India

 SWOT Analysis: India Retail Business Environment
 SWOT Analysis: India Economic
 Retail Market Overview
 Retail Current Trends
 F.M.C.G. Industry Economy
 Market Potentiality of F.M.C.G. Industry
 Growth Prospects of F.M.C.G. in Rural India
 Advantages to the Sector
 Market Opportunities
 Rural Marketing by F.M.C.G. Sector
 Companies Leverage the Deep-Rooted F.M.C.G. Firms’

Network in Rural India

 Indian Competitiveness & Comparison with the World

Markets
 The Future of F.M.C.G.
 II CHAPTER
FAST MOVING CONSUMER GOODS (F.M.C.G.)
INDUSTRY PROFILE

Introduction:

Products which have a quick turnover, and relatively low cost are known as Fast Moving

Consumer Goods (F.M.C.G.). F.M.C.G. products are those that get replaced within a

year. Examples of F.M.C.G. generally include a wide range of frequently purchased

consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving

products and detergents, as well as other non-durables such as glassware, bulbs,

batteries, paper products, and plastic goods. F.M.C.G. may also include pharmaceuticals,

consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate

bars. India’s F.M.C.G. sector is the fourth largest sector in the economy and creates

employment for more than three million people in downstream activities. Its principal

constituents are Household Care, Personal Care and Food & Beverages. The total

F.M.C.G. market is in excess of Rs. 85,000 Crores. It is currently growing at double digit

growth rate and is expected to maintain a high growth rate. F.M.C.G. Industry is

characterized by a well established distribution network, low penetration levels, low

operating cost, lower per capita consumption and intense competition between the

organized and unorganized segments.

History of f.m.c.g. in india:

In India, companies like ITC, H.U.L., Colgate, Cadbury and Nestle have been a

dominant force in the F.M.C.G. sector well supported by relatively less competition and
high entry barriers (import duty was high). These companies were, therefore, able to

charge a premium for their products. In this context, the margins were also on the higher

side. With the gradual opening up of the economy over the last decade, F.M.C.G.

companies have been forced to fight for a market share. In the process, margins have

been compromised.

SWOT Analysis: India retail business

Environment:

The recent “India Retail Report” published by Business Monitor International Limited,

covers the scenario of Indian retail sector. The SWOT analysis of India Retail Business

Environment and India Economic as reported in the said report is reproduced as under:

Strengths:

India attracted US$16.9bn in foreign direct investment (FDI) inflows in 2006, according

to the UN Conference on Trade and Development – a 153% year-on year increase.

1. A cheap, skilled, English-speaking workforce can do the jobs of Western workers

for a fraction of the wages paid in North America or Europe.

2. Average annual GDP growth of 7.0% is predicted by BMI through to 2017. With

the population expected to increase from 1.28bn in 2012 to 1.34bn by 2017, GDP

per capita is forecast to rise 84.4% by the end of the forecast period, reaching

US$3,096.

3. The value of the retail segment is expected to grow from an estimated

INR24.11trn (US$573.95bn) in 2013 to INR36.15trn (US$939.06bn) by 2017, a

rise of 50.0%.
Weaknesses:

1. The competitiveness of local firms is undermined by official red tape, from

foreign investment restrictions to inflexible labour laws.

2. Intellectual property rights are poorly protected in India, one of 12 countries on

the 2009 priority watch list compiled by the US Trade Representative.

3. The rural population of India represents more than 70% of the total, while almost

37% is classified as not economically active by the UN. This is a major obstacle

for retailers seeking to rapidly expand their customer base.

Opportunities:

1. India could enhance the competitiveness of the local industry through further

liberalisation and deregulation.

2. Prime Minister Manmohan Singh is eager to reform the banking sector to

increase the availability of long-term financing, particularly for large

infrastructure projects.

3. The value of the OTC drug sector is forecast to grow by almost 92% by 2017,

when it will be worth an estimated US$7.54bn.

Threats:

1. The arrival of Western players, including management consultancy Accenture

and technology company IBM, is raising local wages in the outsourcing sector.

2. International retailers are restricted by India's strict FDI regulations, although

laws were relaxed in January 2012 to allow foreign investors to own up to 100%

of single-brand retail trading companies in the country. However, they must

source 30% of the goods they sell in India from small and medium enterprises

(previously they could own no more than a 51% majority stake in a joint venture

with a local partner). Multi-brand retailers must still operate through a franchise

or cash-and-carry wholesale model.

SWOT Analysis: india economic:

Strengths:

India has a very large domestic market, and rising domestic demand is a major

driver of economic growth.

A vast supply of inexpensive but skilled labour has turned India into the back

office of the world. Around half of the population is younger than 25.

Weaknesses:

1. Despite rapid economic growth, India remains a very poor country. According to

BMI estimates, India's GDP per capita was roughly US$1,500 in 2011, a third

that of China's.

2. Agriculture remains inefficient, and poor monsoon rains can slash rural incomes

and consumption. Two-thirds of the population depend on farming for their

livelihood.

3. India runs chronic trade and fiscal deficits, both of which are near historic highs.

The government spends a significant part of its revenue on interest payments, subsidies,

salaries and pensions. This limits the amount of money available for infrastructural

improvements.
Opportunities:

1. India's emerging middle class will continue to drive demand for new goods and

services. A wealthier society, combined with tax reforms, would serve to boost

revenue receipts, relieving fiscal pressure.

2. The government has implemented some tax reforms. A uniform goods and

services tax to be implemented in the near future should help boost compliance,

thereby raising government revenue.

3. With Chinese labour costs rising aggressively, India may well enjoy a

manufacturing boom in the coming years as multinational look to take advantage

of a young, competitive workforce and major transport network improvements.

Threats:

1. India's dependency on oil imports is problematic. This undermines the trade

balance and makes India vulnerable to energy price-driven inflation.

2. India is at risk of severe environmental problems. Many of its cities' air and rivers

are heavily polluted, raising questions about the sustainability of the economy's

rapid growth.

Retail market overview

Retail is the second-largest employment sector in India, after agriculture, and employs

44mn people. The industry is dominated by an estimated 15mn independent retailers,

consisting of the local kirana shops, owner-manned general stores, chemists, footwear

shops, apparel shops, paan and beedi (small corner shops) and handcart and pavement

vendors, which together make up the 'unorganised' market. BMI estimates that this
fragmented offering still accounts for about 95% of the country's grocery retail sales.

However, this is changing fast, as multinationals begin to seek opportunities to enter

India and as local organised players accelerate their own expansion and business-activity

efforts in preparation for greater competition. The emergence of organised retail formats

is transforming the face of retailing in India, as domestic and foreign players challenge

the dominance of the country's traditional 'mom and pop' stores by opening chain and

speciality stores across the country to satisfy increasing consumer demand. The country

enjoyed the second highest growth in foreign direct investment (FDI) inflows in the

world during 2011. According to Ernst & Young's 2012 India Attractiveness Survey,

investors view India as an attractive investment destination. India stands as the fourth

most attractive destination for FDI in the survey's global ranking. Domestic market's

high potential driven by an emerging middle class, cost Competitiveness and access to a

highly qualified workforce are the major factors that have been the magnet force to

attract global investors.

FDI inflow rose by 55% to US$28.4bn during April-February 2011/12, while the

cumulative amount of FDI equity inflows from April 2000 to February 2012 stood at

US$246.6bn, according to the latest data released by the Department of Industrial Policy

and Promotion.

The sector that attracted the most FDI inflow during the 11-month period in 2011/12 was

services, with US$5.05bn of FDI. India received FDI worth US$2.21bn in February

2012, representing year-on-year growth of 74%. Cumulative inflows for April-February

2011/12 stood at US$28.40bn.

A.T. Kearney, in its 2011 Global Retail Development Index (GRDI), stated that 'the time
to enter [India] is now'. India's strong growth fundamentals – 9% real GDP growth in

2010; forecasted yearly growth of 8.7% through 2016; high saving and investment rates;

fast labour force growth; and increased consumer spending – make for a very favourable

retail environment and the fourth spot in the GRDI. 'As has been the case for several

years, Indian consumers continue to urbanize, have more money to spend on non-food

purchases, and have more exposure to brands. The result is a powerful, more discerning

consumer class. India's population of nearly 1.2bn – forecast eventually to overtake

China's – also is an attractive target.' In the 2012 GRDI, India slipped one place to fifth,

but Kearney stated that the country 'remains a high potential market with accelerated

retail growth of 15 to 20 percent expected over the next five years'. With organised retail

penetration remaining low, at an estimated 5-6%, the report pointed out that there was

room for growth. It also commented on the ongoing FDI regulations 'story', stating that

the changing FDI climate was leading to several international retailers 'stepping up

inquiries' to enter the market, while others seek local partners. Following New Delhi's

moves in September 2012 to open retail businesses to foreign ownership, IKEA has

applied to the Indian government to set up its stores in the country, the Financial Times

has reported. 'We know that many people are eagerly waiting for the first IKEA store to

open in India,' said Mikael Ohlsson, president and chief executive. 'Once our application

is approved, we will develop a solid plan for the establishment of IKEA stores for many

years to come.' IKEA announced in September 2012 that it plans to double the pace of its

store openings globally to 20- 25 stores a year, focusing on emerging markets such as

China and India. The company indicated earlier in 2012 that it could invest up to

US$757mn in the first stage of its plan in India, and that its total investment in India over
the next decade or two could eventually reach US$1.9bn. Other vibrant sectors of the

retail market include internet shopping, with online retail market likely to be worth

around INR70bn (US$1.57bn) by 2016, up from around INR20bn (US$0.4bn) at present,

helped by increased internet access and the entry of more 'e-tailers', NamNews has

reported. According to industry body Assocham, the market is growing at a rate of 35%

annually, and India will have the third largest number of internet users in the world by

2013. Assocham also carried out a survey of around 5,000 shoppers in the country's

major metros, and found that 40% prefer to shop online because of convenience and the

ease of being able to compare prices. Consumers in Mumbai were most active in online

shopping, followed by those in Ahmadabad and Delhi.

Retail current trends:

The recent retail trends as elaborated in “India Retail Report” published by Business

Monitor International Limited, mentions that, As of July 2009, foreign direct investment

(FDI) inflows to single-brand retail trading stood at approximately US$46.60mn,

according to the Department of Industrial Policy and Promotion (DIPP). However, FDI

inflows to the services sector dropped by 30% to US$2.16bn between April and October

2010, according to the Industry Ministry's latest data.

Industry observers attributed this to India's strict FDI regulations: until January 2012,

foreign investors could own no more than a 51% majority stake in a joint venture with a

local partner, but regulations have now been relaxed to allow foreign investors to own up

to 100% of single-brand retail trading companies in India, as long as they source 30% of

the goods they sell in India from small and medium enterprises. UK-based footwear

company Pavers, which sells premium leather footwear under the Pavers England brand,
became the first foreign retailer to seek government approval to operate without a local

partner after 100% foreign investment was allowed in single-brand retail. Pavers

approached the Foreign Investment Promotion Board (FIPB) with a proposal to invest

US$20mn through its joint venture with London-based Foresight Group, the Economic

Times reported. Pavers formed a joint venture with the Foresight Group in 2008 to

explore growth opportunities in India. The venture launched wholesale operations in the

country and appointed Triton Retail as the master franchisee to sell its range of men's

and women's shoes and accessories. In July 2011, the Committee of Secretaries (COS)

recommended that multi-brand retailers should have the same rights as single-brand

retailers (although they would have to dedicate at least 50% of their proposed investment

to back-end supply chain infrastructure and commit a minimum FDI of US$100mn).

However, both ruling Congress party allies and opposition parties, fearing job losses for

millions of small shopkeepers, disrupted parliament for two weeks in protest at the

proposed relaxation of the rules, stalling some key bills, such as increased food subsidies

for the poor, leading the government to back down over the issue.

Liberalisation was eventually achieved in September 2012, opening up India's retail

doors to retail giants such as Walmart and Carrefour. Walmart had previously said it was

ready to open hundreds of retail outlets if rules were liberalised, with international

players set to bring in their logistical capabilities and aid in a potential overhaul of the

country's distribution infrastructure. Improvements in India's supply chain infrastructure

will lift production efficiencies and lower the wastage of farm output, in turn increasing

consumer goods supplies and easing supply-driven inflationary pressures in the country.

In 1999 India had three shopping malls, collectively covering less than 1mn square feet
(sq ft), or 92,903 square metres (m2). By the end of 2006 the country had 137 shopping

malls, occupying 28mn sq ft (2.6mn m2). In December 2008 it is estimated that there

were more than 450 malls in India, accounting for at least 120mn sq ft (11.1mn m2) of

retail space. According to the Mall Realities India 2010 report by property consultants

Jones Lang LaSalle Meghraj (JLLM) and Cushman & Wakefield India, in association

with Shopping Centres Association of India (SCAI), more than 100 malls with 2.8mn m2

of shopping space were expected to open in India before the end of 2010. India and

China top the list of the leading 20 destinations with the strongest retail real estate

momentum in a 2012 report from Jones Lang LaSalle. Shopping centre stocks in the two

countries are projected to grow by around 15% per annum until 2020. However, India

falls short of China due to weaker real estate Investment momentum and a smaller

international retailer presence, says the report.

F.M.C.G. Industry economy:

F.M.C.G. industry provides a wide range of consumables and accordingly the amount of

money circulated against F.M.C.G. products is also very high. The competition among

F.M.C.G. manufacturers is also growing and as a result of this, investment in F.M.C.G.

industry is also increasing, specifically in India, where F.M.C.G. industry is regarded as

the fourth largest sector with total market size of US$20.1 billion. F.M.C.G. Sector in

India is estimated to grow 60% by 2011. F.M.C.G. industry is regarded as the largest

sector in New Zealand which accounts for 5% of Gross Domestic Product (GDP).

Common F.M.C.G. Products:

Some common F.M.C.G. product categories include food and dairy products, glassware,

paper products, pharmaceuticals, consumer electronics, packaged food products, plastic

goods, printing and stationery, household products, photography, drinks etc. and some of

the examples of F.M.C.G. products are coffee, tea, dry cells, greeting cards, gifts,

detergents, tobacco and cigarettes, watches, soaps etc.

Market potentiality of f.m.c.g. industry:

Some of the merits of F.M.C.G. industry, which made this industry as a potential one,

are low operational cost, strong distribution networks, presence of renowned F.M.C.G.

companies. Population growth is another factor which is responsible behind the success

of this industry.

Growth prospects of f.m.c.g. in rural india:

With the presence of 12.2% of the world population in the villages of India, the Indian

rural F.M.C.G. market is something no one can overlook. Increased focus on farm sector

will boost rural incomes, hence providing better growth prospects to the F.M.C.G.

companies. Better infrastructure facilities will improve their supply chain. F.M.C.G.

sector is also likely to benefit from growing demand in the market. Because of the low

per capita consumption for almost all the products in the country, F.M.C.G. companies

have immense possibilities for growth. And if the companies are able to change the

mindset of the consumers, i.e. if they are able to take the consumers to branded products

and offer new generation products, they would be able to generate higher growth in the

near future.

It is expected that the rural income will rise in future, boosting purchasing power in the

countryside. However, the demand in urban areas would be the key growth driver over

the long term. Also, increase in the urban population, along with increase in income

levels and the availability of new categories, would help the urban areas maintain their
position in terms of consumption. At present, urban India accounts for 66% of total

F.M.C.G. consumption, with rural India accounting for the remaining 34%. However,

rural India accounts for more than 40% consumption in major F.M.C.G. categories such

as personal care, fabric care, and hot beverages. In urban areas, home and personal care

category, including skin care, household care and feminine hygiene, will keep growing at

relatively attractive rates. Within the foods segment, it is estimated that processed foods,

bakery, and dairy are long-term growth categories in both rural and urban areas.

F.M.C.G. Rural demand to show 50% growth in 2012 – assocham:

In a Press Release on January 3rd 2010, The Associated Chambers of Commerce and
Industry in

India (ASSOCHAM) have forecasted an extremely robust growth in the F.M.C.G. sector. The

Press Release is detailed below: Fast Moving Consumer Goods (F.M.C.G.) will be

witnessing more than 50% of growth in its Rural and Semi-Urban Segments by 2012

which in totality is projected to grow at an CAGR of 10% to carry forward its market

size to over Rs.1,06,300 crore from present level of Rs. 87,900 crore, according to an

analysis carried out by the Associated Chambers of Commerce and Industryofindia.

The growing penchant and insatiable appetite of rural and semi-urban folks for F.M.C.G.

products will mainly be responsible for this development as their manufacturers will

have to deepen their concentration for higher sales volumes in such niche areas.

Also, the urban population will develop a larger craze for organic products in the

F.M.C.G. sector from health point of view and as their will not be a large number of

products of organic nature in the F.M.C.G. sector, this industry will have to look for

larger market size in the rural and semi-urban areas, says the Chamber’s analysis.
In the rural and semi-urban areas, F.M.C.G. market penetration is currently about 2% in

general as against its total growth rate of about 8%. The Indian rural market with its vast

size and demand base offered a huge opportunity that F.M.C.G. companies cannot afford

to ignore. With 150 million households, the rural population is nearly three times the

urban.

ASSOCHAM also analyzed that the F.M.C.G. products, which will attract the eyes of

rural and semi-urban folks, will mainly comprise soaps, detergents, cold drinks,

consumer durables, toothpastes, batteries, biscuits, namkeens, mosquito repellants,

refined oil, and hair oil. In the semi-urban areas which will include townships of larger

sizes, the Chamber estimates, a good number of malls will have been put up in the next

2-3 years which will sell large volumes of F.M.C.G. products and thereby increase their

demandphenomenally.

Though the rural and semi-urban demand of F.M.C.G. products will grow larger and

higher, it will put a severe pressure on the margins of manufacturers of F.M.C.G.

products because of cut-throat competition, says the Chamber analysis. The branded

companies in the F.M.C.G. sector that will make killings will include a known number

like Nirma, HLL, Dabur, ITC, Godrej, Britannia,etc.

The rising rural and semi-urban income levels coupled with massive advertisement of

F.M.C.G. products in the electronic media will spread so much of awakening in the rural

and semi-urban folks towards fast moving consumer goods products so much that these

will enlarge their affordability for them.

ASSOCHAM has therefore suggested that to tap the rural and semi-urban market, better

infrastructure facilities like roads, better telecom connectivity to rural persons, proper
sanitation and healthcare facilities should be created.

ADVANTAGES TO THE SECTOR

Governmental policy :

Indian Government has enacted policies aimed at attaining international competitiveness

through lifting of the quantitative restrictions, reducing excise duties, automatic foreign

investment and food laws resulting in an environment that fosters growth. 100% export

oriented units can be set up by government approval and use of foreign brand names is

now freely permitted.

Central & state initiatives :

Recently Government has announced a cut of 4% in excise duty to fight with the

slowdown of the Economy. This announcement has a positive impact on the industry.

But the benefit from the 4% reduction in excise duty is not likely to be uniform across

F.M.C.G. categories or players. The changes in excise duty do not impact cigarettes

(ITC, Godfrey Phillips), biscuits (Britannia Industries, ITC) or ready-to-eat foods, as

these products are either subject to specific duty or are exempt from excise. Even players

with manufacturing facilities located mainly in tax-free zones will also not see material

excise duty savings. Only large F.M.C.G.-makers may be the key ones to bet and gain on

excise cut.

Foreign direct investment (FDI) :

Automatic investment approval (including foreign technology agreements within

specified norms), up to 100% foreign equity or 100% for NRI and Overseas Corporate

Bodies (OCBs) investment, is allowed for most of the food processing sector except
malted food, alcoholic beverages and those reserved for small scale industries (SSI).

There is a continuous growth in net FDI Inflow. There is an increase of about 150% in

Net Inflow for Vegetable Oils & Vanaspati.

MARKET OPPORTUNITIES

Vast rural market :

Rural India accounts for more than 700 Million consumers or 70% of the Indian

population and accounts for 50% of the total F.M.C.G. market. The working rural

population is approximately 400 Millions. And an average citizen in rural India has less

than half of the purchasing power as compare to his urban counterpart. Still there is an

untapped market and most of the F.M.C.G. Companies are taking different steps to

capture rural market share. The market for F.M.C.G. products in rural India is estimated

about 52%t and is projected to touch about 60% within a year. H.U.L. is the largest

player in the industry and has the widest market coverage.

EXPORT - “Leveraging the cost advantage”

Cheap labor and quality product & services have helped India to represent as a cost

advantage over other Countries. Even the Government has offered zero import duty on

capital goods and raw material for 100% export oriented units. Multi National

Companies outsource its product requirements from its Indian company to have a cost

advantage. It adds a cost advantage as well as easily available raw materials.

Sectoral opportunities

Major Key Sectoral opportunities for Indian F.M.C.G. Sector are mentioned below:

• Dairy Based Products India is the largest milk producer in the world, yet only

around 15 per cent of the milk is processed. The organized liquid milk business is in its

infancy and also has large long-term growth potential. Even investment opportunities

exist in value-added products like desserts, puddings etc.

• Packaged Food Only about 10-12 per cent of output is processed and consumed

in packaged form, thus highlighting the huge potential for expansion of this industry.

• Oral Care The oral care industry, especially toothpastes, remains under

penetrated in India with penetration rates around 50%. With rise in per capita incomes

and awareness of oral hygiene, the growth potential is huge. Lower price and smaller

packs are also likely to drive potential up trading.

• Beverages Indian tea market is dominated by unorganized players. More than

50% of the market share is capture by unorganized players highlighting high potential

for organized players.

Rural marketing by f.m.c.g. sector:

With the urban market saturated, F.M.C.G. companies are now targeting the rural

markets. In spite of the income imbalance between urban and rural India, rural holds

great potential since 70% of India's population lives there. Due to the recent government

measures like waiver of loans, national rural employment guarantee scheme and

increasing minimum support price, disposable income in rural India has been rapidly

increasing. However, rural markets present their own sets of problems. These include

poor infrastructure, dispersed settlements, lack of education and a virtually non-existent

medium for communication. Furthermore, retailers cannot be present in all the centers as

many of them are so small that it makes them economically unfeasible.

Hindustan unilever limited (h.u.l.) – shakti :

Hindustan Unilever Limited (H.U.L.) to tap this market conceived of Project Shakti. This

project was started in 2001 with the aim of increasing the company's rural distribution

reach as well as providing rural women with income-generating opportunities. This is a

case where the social goals are helping achieve business goals.

The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the

executives of H.U.L. identifying the uncovered village. The representative of the

company meets the panchayat and the village head and identify the woman who they

believe will be suitable as a SA. After training she is asked to put up Rs 20,000 as

investment which is used to buy products for selling. The products are then sold door-todoor
or through petty shops at home. On an average a Shakti Amma makes a 10%

margin on the products she sells.

An initiative which helps support Project Shakti is the Shakti Vani program. Under this

program, trained communicators visit schools and village congregations to drive

messages on sanitation, good hygiene practices and women empowerment. This serves

as a rural communication vehicle and helps the SA in their sales.

The main advantage of the Shakti program for H.U.L. is having more feet on the ground.

Shakti Ammas are able to reach far flung areas, which were economically unviable for

the company to tap on its own, besides being a brand ambassador for the company.

Moreover, the company has ready consumers in the SAs who become users of the

products besides selling them.

Although the company has been successful in the initiative and has been scaling up, it

faces problems from time to time for which it comes up with innovative solutions. For

example, a problem faced by H.U.L. was that the SAs were more inclined to stay at

home and sell rather than going from door to door since there is a stigma attached to

direct selling. Moreover, men were not liable to go to a woman's house and buy products.

The company countered this problem by hosting Shakti Days. Here an artificial market

place was created with music and promotion and the ladies were able to sell their

products in a few hours without encountering any stigma or bias.

This model has been the growth driver for H.U.L. and presently about half of H.U.L.'s

F.M.C.G. sales come from rural markets. The Shakti network at the end of 2008 was

45,000 Ammas covering 100,000+ villages across 15 states reaching 3 m homes. The

long term aim of the company is to have 100,000 Ammas covering 500,000 villages and

reaching 600 m people. We feel that with this initiative, H.U.L. has been successful in

maintaining its distribution reach advantage over its competitors. This program will help

provide H.U.L. with a growing customer base which will benefit the company for years

to come.

ITC - E-Choupal:

The e-Choupal model has been specifically designed to tackle the challenges posed by

the unique features of Indian agriculture, characterized by fragmented farms, weak

infrastructure and the involvement of numerous intermediaries, among others.

Appreciating the imperative of intermediaries in the Indian context, 'e-Choupal'

leverages Information Technology to virtually cluster all the value chain participants,

delivering the same benefits as vertical integration does in mature agricultural economies
like the USA.

'e-Choupal' makes use of the physical transmission capabilities of current intermediaries

- aggregation, logistics, counter-party risk and bridge financing, while dis-intermediating

them from the chain of information flow and market signals.

With a judicious blend of click & mortar capabilities, village internet kiosks managed by

farmers - called sanchalaks - themselves, enable the agricultural community access ready

information in their local language on the weather & market prices, disseminate

knowledge on scientific farm practices & risk management, facilitate the sale of farm

inputs (now with embedded knowledge) and purchase farm produce from the farmers'

doorsteps (decision making is now information-based).

Real-time information and customized knowledge provided by 'e-Choupal' enhance the

ability of farmers to take decisions and align their farm output with market demand and

secure quality & productivity. The aggregation of the demand for farm inputs from

individual farmers gives them access to high quality inputs from established and reputed

manufacturers at fair prices. As a direct marketing channel, virtually linked to the 'mandi'

system for price discovery, 'e-Choupal' eliminates wasteful intermediation and multiple

handling. Thereby it significantly reduces transaction costs.

'e-Choupal' ensures world-class quality in delivering all these goods & services through

several product / service specific partnerships with the leaders in the respective fields, in

addition to ITC's own expertise.

While the farmers benefit through enhanced farm productivity and higher farm gate

prices, ITC benefits from the lower net cost of procurement (despite offering better

prices to the farmer) having eliminated costs in the supply chain that do not add value.
Launched in June 2000, 'e-Choupal', has already become the largest initiative among all

Internet-based interventions in rural India. As India's 'kissan' Company, ITC has taken

care to involve farmers in the designing and management of the entire 'e-Choupal'

initiative. The active participation of farmers in this rural initiative has created a sense of

ownership in the project among the farmers. They see the 'e-Choupal' as the new age

cooperative for all practical purposes.

Another path-breaking initiative - the 'Choupal Pradarshan Khet', brings the benefits of

agricultural best practices to small and marginal farmers. Backed by intensive research

and knowledge, this initiative provides agri-extension services which are qualitatively

superior and involves pro-active handholding of farmers to ensure productivity gains.

The services are customized to meet local conditions, ensure timely availability of farm

inputs including credit, and provide a cluster of farmer schools for capturing indigenous

knowledge. This initiative, which has covered over 70,000 hectares, has a multiplier

impact and reaches out to over 1.6 million farmers.

Companies leverage the deep-rooted f.m.c.g.

Firms’ network in rural india:

In process of understanding and reaching the scattered rural markets of India, F.M.C.G.

majors H.U.L. and ITC have formed a strong rural distribution network over the years.

These networks reach out to the billion dollar consumer market which companies from

various sectors aim to connect with. Hence, companies across sectors such as telecom,

pharmaceuticals, banking and even cosmetics are queuing up to join forces with

F.M.C.G. firms to leverage the entrenched network.

Pharmaceutical giants Ranbaxy and Pfizer recently tied up with the F.M.C.G. Company,
ITC in order to distribute their over the counter (OTC) products across 6,500 e-Choupal

centers spread across 40,000 villages. The e-Choupal initiative by ITC is by far one of

the most successful initiatives in empowering the rural farmers thus building a healthy

rural network across 40,000 villages in 9 states. The initiative currently empowers 4

million farmers while the number is growing fast. The alliance will open windows for

the less equipped consumers in rural areas and provide them with better medical and

healthcare products currently available only in urban cities and towns.

As corporate partnerships to push rural growth are on an upswing, the recent Reserve

Bank of India (RBI) decision to allow “for profit” companies to be business

correspondents of banks has encouraged such tie-ups.

For instance, in a step to promote financial inclusion, SBI bank has tied up with H.U.L..

H.U.L.’s ‘Shakti Ammas’ network, the self-help groups that distribute the company’s

products in remote villages with a population of 2,000 and less, will now be opening SBI

bank accounts for people. The alliance will ensure that the rural folks not only get access

to capital, but also generate savings. While multiple banks can use a company as a

business correspondent, more than one bank cannot be in the same village. Hence, the

wide spread network of consumer product companies is the most effective way to gain

access to scattered rural market of India.

The Hindustan Unilever (H.U.L.) board also recently announced its strategic alliance

with Tata Teleservices for distribution of latter’s telecom products by leveraging

company’s distribution network in rural markets in India.

Creating a distribution network from scratch is a costly affair and hence arrangements

with F.M.C.G. players are a win-win for both parties as network costs are shared.
However, companies leveraging the F.M.C.G.’s network will be successful only if they

come up with a differential pricing mechanism, keeping in mind the sensitivity of the

market.

Nonetheless, such tie-ups will induce further consumer brand engagements giving

further exposure to the rural folks and also make them aware of various products and

services available in the market.

Indian competitiveness and comparison with the world markets:

The following factors make India a competitive player in F.M.C.G. sector:

1. Availability of raw materials:

Because of the diverse agro-climatic conditions in India, there is a large raw material

base suitable for food processing industries. India is the largest producer of livestock,

milk, sugarcane, coconut, spices and cashew and is the second largest producer of rice,

wheat and fruits &vegetables. India also produces caustic soda and soda ash, which are

required for the production of soaps and detergents. The availability of these raw

materials gives India the location advantage.

2. Labour cost comparison:

Low cost labour gives India a competitive advantage. India's labour cost is amongst the

lowest in the world, after China & Indonesia. Low labour costs give the advantage of

low cost of production. Many MNC's have established their plants in India to outsource

for domestic and export markets.

3. Presence across value chain:

Indian companies have their presence across the value chain of F.M.C.G. sector, right
from the supply of raw materials to packaged goods in the food-processing sector. This

brings India a more cost competitive advantage. For example, Amul supplies milk as

well as dairy products like cheese, butter, etc.

The future of f.m.c.g.

Fast moving consumer goods will become Rs 400,000-crore industry by 2020. A Booz &

Company study finds out the trends that will shape its future. Considering this, the antiageing
skincare category grew five times between 2007 and 2008. It‘s today the fastestgrowing
segment in the skincare market. Olay, Procter & Gamble‘s premium anti-ageing

skincare brand, captured 20 per cent of the market within a year of its launch in 2007 and

today dominates it with 37 per cent share. Who could have thought of ready acceptance

for anti-ageing creams and lotions some ten years ago? For that matter, who could have

thought Indian consumers would take oral hygiene so seriously? Mouth-rinsing seems to

be picking up as a habit — mouthwash penetration is growing at 35 per cent a year.

More so, who could have thought rural consumers would fall for shampoos? Rural

penetration of shampoos increased to 46 per cent last year.

Consumption patterns have evolved rapidly in the last five to ten years. The consumer is

trading up to experience the new or what he hasn‘t. He‘s looking for products with better

functionality, quality, value, and so on. What he ‘needs’ is fast getting replaced with

what he ‘wants’. A new report by Booz & Company for the Confederation of Indian

Industry (CII), called F.M.C.G. Roadmap to 2020: The Game Changers, spells out the

key growth drivers for the Indian fast moving consumer goods (F.M.C.G.) industry in

the past ten years and identifies the big trends and factors that will impact its future. It

has been estimated that F.M.C.G. sector witnessed robust year-on-year growth of
approximately 11 per cent in the last decade, almost tripling in size from Rs 47,000 crore

in 2000-01 to Rs 130,000 crore now (it accounts for 2.2 per cent of the country‘s GDP).

Growth was even faster in the past five years — almost 17 per cent annually since 2005.

It identifies robust GDP growth, opening up of rural markets, increased income in rural

areas, growing urbanization along with evolving consumer lifestyles and buying

behaviours as the key drivers of this growth. It has been estimated that the F.M.C.G.

industry will grow at least 12 per cent annually to become Rs 400,000 crore in size by

2020. Additionally, if some of the factors play out favourably, say, GDP grows a little

faster, the government removes bottlenecks such as the goods and services tax (GST),

infrastructure investments pick up, there is more efficient spending on government

subsidy and so on, growth can be significantly higher. It could be as high as 17 per cent,

leading to an overall industry size of Rs 620,000 crore by 2020. Abhishek Malhotra

(2010) told that the Indian GDP per capita is low but many Indian consumer segments

which constitute rather large absolute numbers are either close to or have already

reached the tipping point of rapid growth. The sector is poised for rapid growth over the

next 10 years, and by 2020, the industry is expected to be larger, more responsible and

more tuned to its customers. Based on research on industry evolutions in other markets

and discussions with industry experts and practitioners, Booz & Company has identified

some important trends that will change the face of the industry over the next ten years.

Some key ones related to evolution of consumer segments are as follows:

1. Accelerating ‘premiumisation’:

The rising income of Indian consumers has accelerated the trend towards

‘premiumisation‘ or up-trading. The trend can be observed prominently in the top two
income groups — the rich with annual income exceeding Rs 10 lakhs, and the upper

middle class with annual income ranging between Rs 5 lakhs and Rs 10 lakhs. The rich

are willing to spend on premium products for their ‘emotional value’ and ‘exclusive

feel‘, and their behaviour is close to consumers in developed economies. They are
wellinformed about various product options, and want to buy products which suit their style.

The upper middle class wants to emulate the rich and up-trade towards higher-priced

products which offer greater functional benefits and experience compared to products for

mass consumption. While these two income groups account for only 3 per cent of the

population, it is estimated that by 2020 their numbers will double to 7 per cent of the

total population. The rich will grow to approximately 30 million in 2020, which is more

than the total population of Sweden, Norway and Finland put together. Similarly, the

upper middle segment will be a population of about 70 million in 2020, which is more

than the population of the UK. Over the next ten years, these groups will constitute large

enough numbers to merit a dedicated strategy by F.M.C.G. companies. Abhisek

Malhotra (2010) added that they have seen companies focused on selling primarily to the

mid segments. Often, there is no clear segmentation being offered. Players would do well

to clearly separate their offerings for the upper and mid segments, and the two should be

treated as separate businesses with a dedicated team and strategy for each.

2. Evolving categories:

Categories are evolving at a brisk pace in the market for the middle and lower-income

segments. With their rising economic status, these consumers are shifting from need- to

want-based products. For instance, consumers have moved from toothpowders to

toothpastes and are now also demanding mouthwash within the same category
Also, consumers have started demanding customised products, specifically tailored to

their individual tastes and needs. The complexities within the categories are increasing

significantly. Earlier a shampoo used to have two variants — normal and anti-dandruff.

Now, you have anti-dandruff shampoos for short hair, oily hair, curly hair, and so on.

Everything is getting customised. The trend towards mass-customization of products will

intensify with F.M.C.G. players profiling the buyer by age, region, personal attributes,

ethnic background and professional choices. Micro-segmentation will amplify the need

for highly customized market research so as to capture the specific needs of the

consumer segment targeted, before the actual product design phase gets underway. The

beauty products market will grow by 20 per cent per annum as result of the changing

socio-economic status of consumers, especially women. Middle-class women are now

more conscious of their appearance and are willing to spend more on enhancing it.

Products such as colour cosmetics (growing by 46 per cent) and sun care products

(growing at 13 per cent) have latched on to this trend rapidly

3. Value at the bottom:

It has been defined the bottom-of-the-pyramid or BoP consumers as those who earn less

than Rs 2 lakhs per annum per household. The group constitutes about 900 to 950

million people. While the middle class segment is largely urban, already well-served and

competitive, the BoP markets are largely rural, poorly-served and uncompetitive. A lot

of the basic needs of BoP consumers are yet unmet: Financial services, mobile phones &

communication, housing, water, electricity and basic healthcare. And so there is

untapped opportunity. Abhisek Malhotra (2010) added that the aspiration was always

there, and increasingly money is coming in. The segment is being targeted primarily with
lower-priced products, say, Rs 2 Parle-G. But increasingly it will need products that

deliver more value say, Rs 5 product that serves as dinner and also delivers nutrition

(vitamins, proteins etc). Companies like PepsiCo and Tata are working on such products.

It is added that the rural BoP population is estimated to be about 78 per cent of the total

BoP population. The segment is becoming an important source of consumption by

moving beyond the ‘survival‘ mode. As a result of rising incomes, the growth of

F.M.C.G. market in rural areas at 18 per cent a year has exceeded that of the urban

markets at 12 per cent. While the rural market comprises only 34 per cent of the total

F.M.C.G. market, given the current growth rates, its contribution is expected to increase

to 45-50 per cent by 2020. It will require tailored products at highly affordable prices

with the potential of large volume supplies. Products such as fruit juices and sanitary

pads which had no demand in the rural markets earlier have suddenly started establishing

their presence. While most F.M.C.G. players have succeeded in establishing sufficient

access to their products in rural areas, the next wave of growth is expected to come from

increasing category penetration, development of customized products and up-trading

rural consumers towards higher-priced and better products.

4. Increasing Globalisation:

While many leading MNCs have operated in the country for years given the liberal

policy environment, the next 10 years will see increased competition from Tier 2 and 3

global players. In addition, larger Indian companies will continue to seek opportunities

internationally and also have an access to more global brands, products and operating

practices.
5. Decentralization:

Despite the complexity of the Indian market (languages, cultures, distances) the market

has mainly operated in a homogenous set-up. Increased scale and spending power will

result in more fragmented and tailored business models (products, branding, operating

structures).

6. Growing modern trade:

Modern trade share will continue to increase and is estimated to account for nearly 30%

by year 2020. This channel will complete existing traditional trade (~8 million stores

which will continue to grow) and offer both a distribution channel through its cash &

carry model as well as more avenues to interact with the consumer.

7. Focus on sustainability:

Global climatic changes, increasing scarcity of many natural resources (e.g. water, oil)

and consumer awareness (e.g. waste) are leading to increased concerns for the

environment. The pressure on companies to be environmentally responsible is gradually

increasing due to involvement of various stakeholders – from government (through

policy) to consumers (through brand choice) and NGOs (through awareness).

8. Technology as a game changer:

Increased and relevant functionality coupled with lower costs will enable technology

deployment to drive significant benefits and allow companies to address the complex

business environment. This will be seen both in terms of efficiencies in the back-end

processes (e.g. supply chain, sales) as well as the front-end (e.g. consumer marketing).

9. Favourable government policy:

Many government actions – in discussions as well as planned – will help in creating a

more suitable operating environment. This will be done both on the demand side by

increased income and education as well as on the supply side by removing bottlenecks

and encouraging investments in infrastructure. The confluence of many of these change

drivers – consumers, technology, government policy, and channel partners – will have a

multiplication impact and magnify both the amount as well as the pace of change.

Winning in this new world will require enhancing current capabilities and building new

ones to bridge gaps. In this new world F.M.C.G. companies will have 6 imperatives from

a business strategy perspective:

1. Disaggregating the operating model

2. Winning the talent wars

3. Bringing sustainability into the strategic agenda

4. Re-inventing marketing for ‘i-consumers’ Re-engineering supply chains

6. Partnering with modern trade

Another big trend that has been is the emerging idea of many Indians. It is added that

despite the complexities of language, culture and distances, the Indian market has largely

been seen as a homogenous market. There‘s one product for the entire country — the

same Maggi noodles for Karnataka and West Bengal, or the same Diet Coke for Punjab

and Assam. Besides, these products have the same advertisements that run across the

country. Increasingly, F.M.C.G. players are realizing that India is not a homogenous

market and consumer preferences vary significantly. By 2020, Maharashtra‘s GDP will

exceed that of Greece, Belgium, and Switzerland, and Uttar Pradesh‘s economic size will

exceed that of Singapore and Denmark. So, having a dedicated firm for Maharashtra or
Gujarat can prove to be a realistic and profitable proposition. We will see companies

coming up with regional products. Hindustan Unilever has teas which are very different

in one state versus the other. Pepsi has a different product in Andhra Pradesh which is

not sold anywhere else. Differentiation used to happen at the country level; now you will

see at the state level. F.M.C.G. players need to grow ‘regional’ in their thinking and

move towards an increasingly decentralized operating model in India. As consumer

preferences differ across regions and states, companies may follow a regional strategy in

terms of product ingredients, positioning, marketing campaign, and channels. Overall,

decentralization or regionalization will become an increasingly important theme for

F.M.C.G. players.

F.M.C.G. in India has a strong and competitive MNC presence across the entire value

chain. It has been predicted that the F.M.C.G. market will reach to US$ 33.4 billion in

2015 from US $ billion 11.6 in 2003. The middle class and the rural segments of the

Indian population are the most promising market for F.M.C.G., and give brand makers

the opportunity to convert them to branded products. Most of the product categories like

jams, toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as

well as low penetration level, but the potential for growth is huge.

The big firms are growing bigger and small-time companies are catching up as well.

According to the study conducted by AC Nielsen, 62 of the top 100 brands are owned by

MNCs, and the balance by Indian companies. Fifteen companies own these 62 brands,

and 27 of these are owned by Hindustan Lever. Pepsi is at number three followed by

Thums Up. Britannia takes the fifth place, followed by Colgate (6), Nirma (7), CocaCola (8)
and Parle (9). These are figures the soft drink and cigarette companies have
always shied away from revealing. Personal care, cigarettes, and soft drinks are the three

biggest categories in F.M.C.G. Between them, they account for 35 of the top 100 brands.

The top 10 companies in f.m.c.g. sector

SR.NO. Companies

1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)

3. Nestlé India

4. GCMMF (AMUL)

5. Dabur India

6. Asian Paints (India)

7. Cadbury India

8. Britannia Industries

9. Procter & Gamble Hygiene and Health Care

10. Marico Industries

(Source: Abhisek Malhotra (2010), ― The future of FMCG, Strategist Team / November 29,
2010, 0:03 IST)

The foods category in F.M.C.G. is gaining popularity with a swing of launches by

H.U.L., ITC, Godrej, and others. This category has 18 major brands, aggregating Rs.

4,637 crore. Nestle and Amul slug it out in the powders segment. The food category has

also seen innovations like softies in ice creams, chapattis by H.U.L., ready to eat rice by

H.U.L. and pizzas by both GCMMF and Godrej Pillsbury. This category seems to have

faster development than the stagnating personal care category. Amul, India's largest

foods company has a good presence in the food category with its ice-creams, curd, milk,
butter, cheese, and so on. Britannia also ranks in the top 100 F.M.C.G. brands, dominates

the biscuits category and has launched a series of products at various prices. In the

household care category (like mosquito repellents), Godrej and Reckitt are two players.

Goodknight from Godrej is worth above Rs 217 crore, followed by Reckitt's Mortein at

Rs 149 crore. In the shampoo category, H.U.L.'s Clinic and Sunsilk make it to the top

100, although P&G's Head and Shoulders and Pantene are also trying hard to be

positioned on top. Clinic is nearly double the size of Sunsilk Dabur is among the top five

F.M.C.G. companies in India and is the herbal specialist. With a turnover of Rs. 19

billion (approx. US$ 420 million) in 2005-2006, Dabur has brands like Dabur Amla,

Dabur Chyawanprash, Vatika, Hajmola and Real. Asian Paints is enjoying a formidable

presence in the Indian sub-continent, Southeast Asia, Far East, Middle East, South

Pacific, Caribbean, Africa and Europe. Asian Paints is India's largest paint company,

with a turnover of Rs.22.6 billion (around USD 513 million). Forbes Global magazine,

USA, ranked Asian Paints among the 200 Best Small Companies in the World Cadbury

India is the market leader in the chocolate confectionery market with a 70% market share

and is ranked number two in the total food drinks market. Its popular brands include

Cadbury's Dairy Milk, 5 Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380 Million)

Marico is a leading Indian group in consumer products and services in the Global Beauty

and Wellness space.

The Rs.85, 000 crore F.M.C.G. market in India is growing at a fast pace despite of the

economic downtrend. The increasing disposable income and improved standard of living

in most tier II and tire III cities are spearheading the F.M.C.G. growth across the nation.

The changing profile and mind set of the consumers has shifted the thought to ―Value
for Money from ―Money for Value. Over the years companies like H.U.L., ITC and

Dabur have improved performance with innovation and strong distribution channels.

Their key categories have strengthened their presence and outperformed peers in the

F.M.C.G. sector. On the contrary, Colgate Palmolive and Britannia Industries are strong

in single product category i.e. tooth - Pastes and Biscuits. In addition companies have

been successful in reviving their presence in the semi-urban and rural market. In 1991,

India has opened country to foreign brands. As per this liberalization policy many a

foreign players ventured into our country finding it a lucrative large mass market. This

research paper is a theoretical paper studying the coping strategies of Indian players in

competition to the MNC companies. It studies those Indian players who have stood out

in this competition and have been successful in doing so.

 III CHAPTER
COMPANY PROFILE

 Logo
 Company overview
 Vision and Mission
 Awards and Achievement
 Human resource strategy
 Financial Strategy
 III. CHAPTER
COMPANY PROFILE

Logo:

Overview
Type : Public

Industry : Conglomerate

Founded : 1974; 45 years ago

Founder : R S Agarwal

R S Goenka

Headquarters : Kolkata, West Bengal,

India

Products : FMCG, Print, Real estate,

Healthcare, Cement,

Retail
Net Revenue : ₹2541crore (2017-2018)

Market Capitalization : ₹25000 cr

Number of employees:3,300

Brands : Boroplus, Navratna,

Zandu balm, Fair and Handsome,

Mentho plus balm, Fast Relief,

Zandu Sona Chandi, Kesari Jivan,

Vasocare, Zandu Healthcare,

7 Oils in One, Kesh King,

HE, Diamond Shine.

Global business : Overseas Operations

Number of locations : Kolkata

Mumbai

Delhi

Hyderabad

Subsidiaries : UAE

Sri Lanka

Australia

Egypt

Russia
Website : www.emamigroup.com

Awards:

“Emami City” has won the Special Commendation Award for Creating High Quality Living
Spaces in EAST Zone at the CNBC-AWAAZ Real Estate Awards- East, organised on 17th
February 2018 at The Park, Kolkata.

CNBC-AWAAZ Real Estate Awards are India's biggest and one of the most credible real
estate awards. Driven by stringent criteria and a robust methodology along with a
comprehensive survey and a jury process, these awards identify India’s best projects.”

Emami city honoured with realty plus excellence awards (east) 2017

‘Emami City’ has been awarded the prestigious ‘Realty plus Excellence Awards (EAST)
2017’ for category – ‘Mid-Segment Project of the Year’. The distinguished award is
recognition of our pre-eminent work in bringing up this excellent ‘housing project’. ‘The
Realty plus Excellence Awards’ is one of the most credible awards in the real estate sector,
which creates space for recognition and contributions made by the awardee in the Real Estate
Sector through its innovative projects.

‘Prashansa patra’ (certificate) for 2015 by national safety council of india

(nsci) for its emami city project

Emami Realty Ltd. And its establishment partner, M/s Larsen & Toubro Ltd., ECC, Kolkata
have been awarded ‘Prashansa Patra’ (Certificate) for 2015 by National Safety Council of
India (NSCI) for its EMAMI CITY Project.

The award has been conferred on Emami Realty for playing a crucial role in developing and
implementing effective safety systems and procedures on the project site and Larsen &
Toubro for developing and implementing the effective occupational safety & health
management systems and procedures and achieving good safety performance during the
assessment period (calendar year 2014).
About NSCI

The NSCI Safety Awards are much coveted national level Awards in the field of Workplace
Safety, Health and Environment and are given in recognition of establishing effective Safety
Management System and excellent safety and health performance by the organizations in
Manufacturing, Construction and MSME Sectors during the relevant assessment periods.
These Awards are adjudged and declared every year by the National Safety Council. The
National Safety Council, non-commercial, non-profit making autonomous society, was set up
by the Ministry of Labour, Govt. Of India on 4th March, 1966 to generate, develop and
sustain a voluntary movement on Safety, Health and Environment in the Country.

Corporate social responsibility

Emami Realty is committed to be a good corporate citizen, not only with respect to
compliance with all relevant laws and regulations, but also by actively assisting in the
improvement of the quality of life of the people in the communities in which it operates
through planned CSR interventions. As an organisation we believe in ‘giving back to society
at large through sustainable partnership with our external stake holders by improving their
quality of life’.

Corporate csr activities will have:

 Free medical/health check up camps, blood donation camps and eye check up
campsMid-day meals to Municipal/ Government schools
 Merit scholarship for vocational training of needy and meritorious students
 Distribution of books in nearby schools to needy students
 Events for promotion of the objectives of National Environmental Policy 2006 such as
World
 Events for promotion of World Environment Day on June 5
 Events for promotion of sports and culture

Project site csr activities will have:

 Initiatives for under privileged children in project catchment area

 Subsidized canteen facility for labour
 Conducting Free Medical Camp for labour
  Plantation of new trees, maintaining old trees in project catchment area
 Provision of water kiosks in surrounding areas
 Provision of waste collection bins in surrounding areas of project site
 Beautification of the pavements in project catchment area

Emami Limited is one of the leading and fastest growing personal and healthcare businesses
in India, with an enviable portfolio of household brand names such as BoroPlus, Navratna,
Europe, Africa, CIS countries and the SAARC. Over 121 Emami products are sold every
second somewhere around the world. Emami Limited, the flagship company of the Group,
recorded a turnover of Rs 2541crore, 2017-18.

Emami acquired the heritage brand Zandu in 2008 on the basis of huge business synergy
between the two brand portfolios.

Emami also acquired Ayurvedic Hair & scalp business of "Kesh King" as a business strategy
in 2015.

We employ nearly 3300 people, reach out to 40 lakh plus retails outlets through a network of
3150 distribFair and Handsome, Zandu Balm, Mentho Plus Balm, Fast Relief and Kesh King.

Established in 1974, we have a portfolio of over 300 products based on ayurvedic

formulations. Our current operations comprise more than 60 countries including GCC,

utors and have invested in Eight plants, Four regional offices, 1 overseas unit, Nine overseas
subsidiaries and 31 distribution centres and 1 Associate across India.

About group companies

Established in early 70's, Emami group has grown in India with presence diversified sectors
such as FMCG, newsprint manufacturing and packaging boards, edible oil and biodiesel, real
 estate, hospitals, ballpoint tip manufacturing, retail, pharmacy chain, cement, solar power and
contemporary art. Founded by two friends, Mr RS Agarwal and Mr RS Goenka, Emami
today is a trusted and loved brand of the nation with over 25,000 employees and a group
turnover of about Rs.12,000 cr with a market valuation of around Rs. 50,000 cr.

Key businesses
FMCG - Emami Limited is one of the leading and fastest growing personal and healthcare
businesses in India, with an enviable portfolio of household brand names such as BoroPlus,
Navratna, Fair and Handsome, Zandu balm, Mentho Plus balm and Kesh King.
W - www.emamiltd.in

Newsprint - Emami Paper enjoys the position of being the largest manufacturer of newsprint
in India, and the only manufacturer in eastern India with units in Kolkata and Balasore. The
Company has shifted its focus into paperboard manufacturing and has already become a
rising star in the premium paperboard segment.
W - www.emamipaper.in

Ball pen tips manufacturing - CRI is a specialized company that creates and designs pen tips
for the leading writing instrument brands of the world. CRI today stands as the first and only
pen tip manufacturing company in India to be awarded the highly prized ISO 9001-2000
Certification. It operates from two state-of-the-art production facilities, one at Ahmedabad: a
purpose-built facility, and the other at Kolkata.
W - www.critips.com

 Retail - Starmark, retailing books, stationeries and gift items. It is one of the largest leisure
retail store in India with 5 stores in Kolkata and 2 in Chennai and has plans for further
expansion. Recently launched in Kolkata, ‘Studio by Starmark’ is a new format store,
featuring an eclectic collection of lifestyle products & stylish home accessories.
W - www.starmark.in

 Pharmacy - Emami Frank Ross Ltd. is the oldest and largest pharmacy chain in Eastern
India. The first Frank Ross store was set up in 1906. An ambitious plan of having a network
of the pharmacy retail chain with over 300 outlets all over India has been taken up by the
Group.
W - www.frankrosspharmacy.com
 Infrastructure and development - Emami also has large presence in real estate in West
Bengal. It has successfully executed more than 24 prestigious residential and commercial
construction projects, mainly in Kolkata. The existing projects span across the states of West
Bengal, Uttar Pradesh, Tamil Nadu, Andhra Pradesh and Maharashtra and Sri Lanka.
W - www.emamirealty.com W - www.southcityprojects.com W - www.urbana.co.in

 Art - Emami Art Gallery since inception has promoted Indian art and young artists through
numerous exhibitions, retrospectives, art catalogues and publications. It has established itself
as one of the finest venues in East India, dealing in works of both modern and contemporary
art. Spread across 15000 sq ft. the gallery collection includes paintings, sculptures, prints and
drawings sourced from the artists themselves, or from reputed art galleries and private
collectors. Emami Art is embellished with a characteristic mix of genuine masterpieces and
rare collections from India's eminent artists and contribution from the new generation
contemporary artists.
W - www.emamiart.com

 Edible oil - The brand Healthy and Tasty is one of the most admired edible oil brand in the
country manufactured and marketed by Emami Agrotech Ltd. The Company's vision is to
pursue aggressive growth to become prominent edible oil player offering healthy and high
quality consumer products.
W - www.emamiagrotech.in

 Healthcare - AMRI Hospitals, a multi-specialty healthcare facility in Eastern India with

specialization in Oncology, Neuro Sciences, Cardiac Sciences, Orthopaedics, Emergency
&Trauma care, Gynaecology& Childcare is the largest player in private sector with its
existing strength of around 1000 beds. It has 4 units in Kolkata and one in Bhubaneswar.
W - www.amrihospitals.in

 Cement - The Group has set up a Cement Plant in Chhattisgarh and a grinding unit in West
Bengal. Another grinding unit is being set up in Odisha. Emami Cement Limited (ECL) has
commenced operations of its cement business under the 'Emami Double Bull' brand in the
markets of Chhattisgarh, West Bengal, Odisha, Madhya Pradesh, Maharashtra, Jharkhand &
Bihar.
W-www.emamicement.com
 Bio diesel - Emami Agrotech Ltd. is the largest manufacturer of Biodiesel in Eastern India
and a key exporter of biodiesel to Europe and other South East Asian Countries.
W - www.emamiagrotech.in

The journey

Tale of Two Families

From the days of hand pulled rickshaws to a network of over 3150 distributors

Mr. RS Agarwal and Mr. RS Goenka, Founders, Emami Group, in their first rented office,
Kolkata

A humble beginning:

The inception of Emami Group took place way back in mid-seventies, in West Bengal, when
two childhood friends, Mr. R.S. Agarwal and Mr. R.S. Goenka left their high profile jobs as
Chartered Accountants, with the Birla Group to set up Kemco Chemicals, an Ayurvedic
medicine and cosmetic manufacturing unit in Kolkata, in 1974.

It was an extremely bold step in the early seventies when the Indian FMCG market was still
dominated by multinationals. Several such companies headquartered in Kolkata were
considering shifting out of West Bengal due to labor unrest and political problems.

But against all odds with a vision of combining the age old wisdom of Ayurveda with modern
manufacturing techniques for creating winning brands the company started with a merger
amount of Rs. 20,000. A dream of reaching out to the Indian middle class; a target audience
whom they thought will have increasing potential for consumption, the company started
manufacturing cosmetic products as well as Ayurvedic medicines under the brand name of
Emami from a small office (still retained) in Kolkata's business district of Bada Bazar. Their
consumer insight is reflected today in the mission statement of Emami Limited: "Making
people healthy and beautiful naturally".

Differentiate or die. Innovate or perish

This is what set the ball rolling when the partners launched Emami Talcum, Emami
Vanishing Cream and Emami Cold Cream and glycerine soap, which were great favourite
brands with the quality conscious consumers in the mid-seventies. The company soon
became adept in selling beautiful dreams to Indian women interested in finding their own
identity. The signature tune of Emami played over radio and TV became a household
favourite.

In the early days the two friends used to go around places and sell their cosmetics from shop
to shop. They piled their goods on hand pulled rickshaws and went on distribution drives
making their brand extremely popular, available and acceptable among consumers.

The first-rate quality of the products soon created a consumer pull and gradually some people
were hired to work for them. A chain of distributors was established and the sale of Emami
products spread from West Bengal to rest of Eastern India and gradually to other states.

Acquiring Himani Ltd

In 1978, Himani Ltd (incorporated as a Private Limited Company in 1949) had become sick
unit and was up for sale. Himani, almost a 100 year-old company with good brand equity in
Eastern India and a well laid out factory in Kolkata, was producing a number of cosmetics.
Mr. Agarwal and Mr Goenka realized the opportunity and acquired Himani though for their
young organization it was a tough task to mobilize resources for buying a sick unit and even
tougher to turn it around to a profitable venture. The degree of financial risk involved was
enormous considering the small capital base of the company in those days. However, they
decided to go ahead with the deal which later on proved to be the turning point for the
organization.

Introducing power brands - Boroplus and Navratna

Production of various health care items and toiletries based on Ayurvedic preparation had
begun in the Himani factory. Ten years after commencement of the company, it launched
their first flagship brand Boroplus Antiseptic Cream under the Himani umbrella in 1984.
Many additional brands followed Boroplus including Boroplus Prickly Heat Powder which
came as a brand extension of the mother brand. Emami brands started selling in all states of
North, East and West India. Today Boroplus is not only the largest selling Antiseptic Cream
in India but also in Russia, Ukraine, and Nepal.

Nineties was very eventful for Emami. The next flagship brand of the company Navratna
Cool Oil came in the nineties under the Himani Umbrella and the second factory was opened
at Pondicherry to expand production. Navratna over the years has become market leader in
the cool oil category.

The introduction of new brands continued and the distribution network of the company was
extended to South India with Navratna spear heading the process.

Public issue

In 1995, Kemco Chemicals, the partnership firm was converted into a Public Limited
Company under the name and style of Emami Ltd. In 1998, Emami Ltd was merged with
Himani Ltd and its name was changed to Emami Ltd as per fresh certificate of incorporation
dated September1, 1998.

In 2000, with a view to concentrate on its core FMCG business, Emami's investment
undertaking was demerged and Pan Emami Cosmed Ltd. issued its fully paid up shares to
shareholders of Emami in the ratio of 1:1. In 2003 a new factory unit was set up at
Amingaon, Guwahati.

A Public Issue of 50 lacs Equity Shares of Rs 2/- each at a price of Rs. 70 followed in 2005.
The issue was oversubscribed within few seconds of its opening with an overall over
subscription of 4 times of the issue size. The share price sold at Rs. 70, today is quoted in the
stock market as over Rs. 3165.considering all the aspects.

Global footprint

Taking one step at a time Emami went overseas and international business contributes around
11% of the total revenue, growing at a CAGR of 17% over last ten years.

Emami has 9 international subsidiaries and 1 associate and its global reach extends to more
than 60 countries including India, SAARC, GCC, UK, Sri Lanka, Bangladesh, Nepal, African
and the CIS countries.
Beauty secrets and amazing array of ambassadors

In 2002 Emami roped in film actor Madhuri Dixit as brand endorser of a full range of its
cosmetics including hair oil, sunscreen lotion, shampoo, fairness cream and talcum powder.
The products were formulated after intensive research and inputs from both Madhuri Dixit.
The actor had been collecting beauty secrets from across the globe, and the company decided
to brand the cosmetics the 'Beauty secrets by Madhuri' range. While it is yet another first in
Emami's 'first' list it is also the first time in brand history that an endorser co-owns a brand.

Emami has successfully established its brands through strong celebrity endorsements. In a
market where competition is intensifying, product lifecycle is shrinking and strategic
management of a company is gaining pivotal position Emami's inclusion of celebrities as
brand ambassadors established that it strictly relies on its own unique method of retailing.

It is the only brand in the country to have both Amitabh Bachchan and Shah Rukh Khan as
endorsers for the same brand, Navratna. The concept of brand endorsement by celebrities was
successfully experimented in case of most of the brand launches. To name a few celebrated
and acclaimed entertainment and sports personalities who have endorsed Emami products
over the years-

Entertainment industry - Amitabh Bachchan, Rakhi, Dharmendra, Divya Bharti, Shah

Rukh Khan, Hrithik Roshan, Shahid Kapoor, Madhuri Dixit, Kareena Kapoor Khan, Kangana
Ranaut, Preity Zinta, Malaika Arora Khan, Suriya, YamiGautam, Juhi Chawla, Shruti
Haasan, Shilpa Shetty, Bipasha Basu, Sonakshi Sinha, Parineeti Chopra, Mahesh Babu,
Govinda, Chiranjeev, Surya, and Upendra among others.

Sports fraternity - Mahendra Singh Dhoni, Sourav Ganguly, Dinesh karthik, Amit Mishra,
Virendra Sehwag, Sachin Tendulkar, Gautam Gambhir, Milkha Singh, Vijendra Singh,
Harbhajan Singh, Zaheer Khan, Mary Kom, Saina Nehwal, Sushil Kumar, Sania Mirza etc

A pioneering story- launch of Fair and Handsome

In 2005 Emami created a marketing history in India by launching Fair and Handsome, the
first fairness cream for men. In a tropically harsh country like India, a fairness cream for men
represented an unexplored opportunity. Emami created a completely new market segment by
introducing India's first fairness cream customised for men.

Travelling the region and by interacting with a host of retailers and intermediaries Emami
discovered that 30 to 35 per cent of users of fairness creams are men, with a growing interest
in personal grooming. The sales of Fair and Handsome in its first year had touched around Rs
50 crore. Another feather on the cap was when Emami roped in Bollywood superstar Shah
Rukh Khan to endorse the brand, targeting the male fairness cream market in India which
immediately made the brand even more popular and trusted by the consumers.

Consumer healthcare division

In 2006 the company decided to introduce a Health Care Division and a number of new
brands of Ayurvedic OTC medicines. The company has taken up the challenge of growing
this new division with a dedicated and enthusiastic team working on this project.

Acquiring a heritage brand - Zandu

Emami Limited with an investment of Rs 730 crore acquired Zandu Pharmaceuticals Works
Ltd on the basis of huge business synergy between Zandu and Emami. Post the acquisition of
Zandu Pharmaceuticals, a century old household name in India, some of its prominent brands
like Zandu Balm, Zandu Chyawanprash, Zandu Kesri Jeevan, Zandu Pancharishta, Sudarshan
and Nityam Churna came under Emami's basket of brands.

Sustainable growth and excellence

In 2006, J B Marketing & Finance Ltd., the erstwhile marketing company of the Emami
Group merged with Emami Ltd. and the total turnover of Emami including sales in domestic
and export market stood at Rs 518 crores at the end of the fiscal year 2006-07.

Within four decades, the company Emami Ltd has a turnover of Rs. 2541 crore, the flagship
company of the Rs.16000 crore Emami Group.

Today, Emami Limited is led by Mr. R S Agarwal and Mr. R S Goenka with the help of the
second generation Promoter Directors from the two families. Emami Limited has a team of
over 3300 people running one of the leading and fastest growing personal and healthcare
businesses in India.
Naya
Emami
Emami is attractively placed to capitalise this opportunity. The Company has invested
aggressively and proactively to ride the digital curve with the objective to emerge younger.
The Company has always been an early adopter of new technologies from the early days of
barcode scanning to the today's world of robotics and self-service. Besides, new retail
technologies offer Emami an opportunity to innovate service consistency and back-office
management.
There are several new rules of the game, warranting not just a change in the way we see
things but a completely new set of eyes. We derive a deep understanding of consumer
preferences through formal and informal engagements. We examine how different customer
categories - housewives, farmers, bankers and students - consume. This consistent
understanding of grassroot realities did something important for Emami: it helped us focus on
the power of ayurvedic formulations, our biggest competitive advantage. Besides, Emami
recognises that in a new business environment, there is a premium on the need to specialise.
This understanding prompted us to acquire focused companies as opposed to growing those
capabilities patiently from within.

Making the most of the digital revolution In retail, more than almost any other sector, the
move to a digital economy is bringing about a paradigm shift. There is an increasing need to
blend traditional operating models with new-age technologies. With the advent of 4G data
networks, a number of consumers have found an ideal purchase reference point through the
digital media. The result is that India's digital commerce market is expected to exceed US$50
billion in revenues by the end of this year. As e-commerce grows, so should the country's
ayurvedic and natural e-commerce segment. While most e-commerce platforms can expect a
seven to ten-fold increase in revenue generation, the e-commerce market for ayurvedic and
natural products would not only ride the digital wave but will also benefit from changes in
consumer behaviour.

The country is transforming India stands at an inflection point. The country is marked by
growing per capita disposable incomes. Most citizens have grown their aspirations.
Consumers are willing to pay higher for value-added products. The digital age is creating
disruptive business opportunities.
And...Emami is transforming
Emami is leveraging the strengths of the past and addressing the challenges of the day. We
are investing in cutting-edge technologies. We are mining data more extensively. We are
strengthening our retail connect. We are exploring different delivery formats.
For instance, by deciding to market NityamChurna in a tablet form, we virtually transformed
a decade-old legacy into a modern application.
The Company is also investing in startups; it acquired a strategic stake in Helios Lifestyle, an
online premium male grooming company widely known for it's 'The Man Company'' brand.
We took this move forward by acquiring a strategic stake in Brillare, which offers natural and
premium professional salon products.
We invested >Rs300 crore in an international standard state-of-the-art manufacturing facility
at Pacharia (Assam), one of the largest in the country's FMCG sector.
The big message is that Emami is virtually reinventing itself across every dimension to
accelerate its growth momentum.

Strengthening our core brands

In the modern world, the strength of a brand is being increasingly manifested through an
ever-widening array of media options. Emami is attractively placed in this regard. Our core
brands continue to be active revenue generators enjoying market leadership despite being
present for years. We believe that most consumer segments we are present in are
underpenetrated, offering our brands substantial room for growth. We are continuously
investing in our brands to enhance their relevance. We are focusing on brand extensions to
carve out larger market shares. We are investing in cutting-edge packaging technologies to
enhance aesthetic appeal.

Enhancing market reach

The lean-manufacturing revolution has prompted companies to reinvent how they build
efficiently. Emami has extended this commitment to sales and marketing. When growth was
elusive, we made strategic investments in our sales infrastructure. We widened and deepened
our market presence. This is the result: Emami's products are not only available in all Indian
cities but even in more than 25,000 villages with a population of <5,000 across the country.
We enjoy a direct coverage via 8.5 lac retailers and an indirect coverage via 4.3 million
retailers. Our distributor network comprises 3,150 dealers. We sharpened our focus on the
modern trade channel as a key growth driver, increasing its contribution from 4% of revenues
in FY17 to 6% in FY18.
 Building on corporate governance
The modern world warrants a firm commitment towards enhancing business transparency and
credibility. Hence, a seamless governance mechanism separates the successful from the rest.
Over the years, Emami established a robust governance framework. The Company's Board
comprises eminent personalities from diverse industry spaces; the various Board Committees
oversee specific responsibilities that enhance understanding and compliance.

Future Outlook
Emami's new-age products comprise differentiated offerings based on the age-old wisdom of
ayurveda.
Thanks to our aggressive marketing campaigns and continuously expanding distribution
network, we made the most of incipient trends and intend to sustain this across the years that
lie ahead. As the world transforms and new opportunities emerge, Emami is equipped to
surge ahead.

Acknowledgements
We are thankful to all our stakeholders for being a part of the Emami journey and look
forward to their continued support as we advance towards realising our vision of a 'Naya
Emami'.

purpose
Vision, mission & purpose

Our vision

Making people healthy and beautiful, naturally

Our mission

 To contribute whole heartedly towards the environment and society integrating all our
stakeholders into the Emami family
 To make Emami synonymous with natural beauty and health in the consumers mind
 To drive growth through quality and innovation in products and services.
 To strengthen and foster in the employees, strong emotive feelings of oneness with the
company through commitment to their future
 To uphold the principles of corporate governance
 To encourage decision making ability at all levels of the organization

We would strive

 To be part of every household in the country

 To be a major player in every product category we venture into
 To be one of the most respected marketer in the country
 To be recognized as a global brand

About group companies

Strategy

The group strategy is for growth through both Organic and Inorganic expansion.

This will be driven by power brands, upcoming brand extensions and new launches, coupled
with a wider international presence through acquisitions.

Drive our top line

 Enhance product recall through aggressive promotion via celebrities

 Expand distribution to reach rural pockets
 Differentiated ‘Value For Money’ products
 Innovate and enter new product categories
 Undertake brand extensions
 Wider international footprint ,entry in new geographies – drive exports
 Leverage existing distribution network

Grow bottom line

 Engage in effective and continuous cost control initiatives

 Reduce proportion of ad- spend with increase in volumes
 Stabilization of new launches and brands
 Enjoy benefits of economies of scale
 Leverage on low cost manufacturing taking full benefit of location advantage
Innovation

Our research and innovation team is dedicated to delivering products that excite customers
and meet their need gaps. Our products are the result of understanding consumers’ unmet
needs, through a path breaking technology. We combine generations of practical experience
with a continuous flow of new knowledge.

Research and innovation centre

A state-of-the-art, high-end multi-storey Research & Innovation Centre, spanning more than
30,000 sq. ft, is created in Kolkata. The Centre encompasses product innovation
development, product processing science, competitive intelligence cell, analytical
development, perfumery science, quality assurance and packaging and development.

Some of our breakthrough innovations

Fair and handsome

In 2005 Emami created a marketing history in India by launching Fair and Handsome, the
first fairness cream for men. In a tropically harsh country like India, a fairness cream for men
represented an unexplored opportunity. Emami created a completely new market segment by
introducing India’s first fairness cream customised for men.
Travelling the region and by interacting with a host of retailers and intermediaries Emami
discovered that 30 to 35 per cent of users of fairness creams are men, with a growing interest
in personal grooming. The sales of Fair and Handsome in its first year had touched around Rs
50 crore.
Navratna cool talc

Emami has launched Navratna Cool Talc Active Deo for the summer nationally with
placement in more than 80, 000 outlets in all major towns. The unique blend of mint and
camphor generates cooling effect which rejuvenates the senses and keeps one vibrant and
fresh throughout the day.

Innovation in packaging

Today packaging plays a crucial part of communicating with the consumer, both on
intellectual and emotional values. The use of conventional packaging materials in an
unconventional way is another innovation at Emami. We are continuously searching
alternatives to make the pack more cost effective without compromising quality and values.
For example- Triangular designed mono-carton for our brands Lalima and Sardija,
conversion from tube pack to spout packs is the example of optimization. MenthoPlus Balm
and Zandu Balm small packs are the result of adopting modern molding technology. Navratna
cool talc in 3D design pack is to give fine experience to consumers to hold and dispense the
product in a convenient way. Vasocare petroleum jelly pack with an in-built flip top cap is
another example of innovation in packaging. Today most important mission of packaging
development is to take care of consumer convenience. Also optimization of all packaging
specification results in reduction of raw material usage and thus taking care of our
environmental concerns.

Celebrity endorsements and in film placements

Emami is proud of its innovative marketing strategy of getting celebrities on board for
endorsements of a bouquet of products. India is a market of over a billion people and a
majority of this market is rural , at the bottom of the pyramid. It is price sensitive and
emotional. This segment responds to the pull of a visible celebrity. Thus, over a period of
time Emami roped in many superstars from the entertainment and sports field to endorse its
products. The brand ambassadors were signed on the basis of the brand need and the fit
between the particular brand and the star. Emami’s brands continue to be endorsed by some
of the leading celebrities of the country. They include Amitabh Bachchan, Shah Rukh Khan,
Kareena Kapoor, Chiranjeevi, Mahesh Babu, Suriya, Bipasha Basu, Malaika Arora Khan,
Govinda, Sourav Ganguly, Sunny Deol, Madhuri Dixit, Virendra Sehwag, Sachin
 Tendulakar, Milkha Singh, Hritikh Roshan ,Sonakshi Sinha, Shruti Haasan and Yami
Gautam among others.

Accolades

Corporate awards and rankings

 EMAMI LIMITED makes it to the prestigious SUPER 50 listing by Forbes India for the
2nd year consecutively.(August 2016)
 Emami Limited has been adjudged as the Winner of "Golden Peacock Innovation
Management Award" for the year 2016, by the Awards Jury under the Chairmanship
of Justice M.N. Venkatachaliah, former Chief Justice, Supreme Court of India. (November
2016)
 EMAMI LIMITED has been ranked as the 87th MOST VALUABLE COMPANIES in
the BT 500 list of 2016. Emami jumped 4 ranks this year, compared to 2015 by improving
its average market cap by 6%. (November 2016)
 Emami's rank rose to 342nd position in 2016 from the 423rd position year before in BW
Real 500 Companies, a ranking of India's largest companies conducted by Businessworld
Magazine. The ranking has been done on basis of their combined total assets and total
income. In the subsector for Market Cap, Emami ranked 65th out of top 70 companies
featured. (January 2017)
 Emami Limited, in recognition of its social commitment as a good corporate citizen, has
been awarded with the 'CSR LEADERSHIP AWARDS'- in Category- "Support &
Improvement in Quality of Education". The award has been presented at the forum
of World CSR Congress, in partnership with the leading news television channel ABP
News (Hindi). (February,2017)
 Emami Limited retained its 349th rank in the FE 1000 2016 ranking. The Company also
bagged the 90th position in the Market Cap section in the same ranking. (February, 2017)
 Emami Limited has bettered its ranking from the 326th rank in 2015 to the 291st rank in
2016 in BS Super 1000 Ranking - a jump by 35 ranks. In the sectoral section, Emami
Limited has scored the 14th position under the "Consumer Staples" out of 38 companies.
(March 2017)
 Brands and Marketing Awards

 Navratna wins the SILVER in WOW Award 2016 in the category "Rural Activation of the
Year for Sales Volume". (June 2016)
 HE Deos has won a prestigious IndIAA award for best campaign in personal care category.
The brand has won the same award for our HE Respect campaign, which has featured Vir
Das & Hritik Roshan, which was aired digitally in May 2016. (September, 2016)
 "BOROPLUS", one of the major Power Brands made a whopping jump by 30 ranks to the
54th position in the "Top 100 Most Trusted Brands" of the ET Brand Equity Survey 2016
from the 84th rank of the last year. The Survey has also featured another power brand
ZANDU in the 100th position in the overall ranking and 6th in the sub category of OTC
brands. (January, 2017)

Individual recognition

 Mr. Naresh H Bhansali, CEO - Finance, Strategy & Business Development and CFO,
Emami Limitedhas been awarded the Best CFO Award for Consistent Liquidity
Management in Mid-Cap segment by the YES Bank-BW Businessworld CFO Awards
2016. As a double bonanza to this honour, the Yes Bank BW Businessworld CFO Awards
2016 decided to present Mr. Bhansali with a very special Jury Award of being the Overall
Champion CFO. (April 2016)
 Mr. Harsha V Agarwal has been selected as one of the winners of the prestigious ‘FORTY
UNDER 40’ list of 2016 in the third edition of India’s top 40 under 40 list, put together
by Spencer Stuart in collaboration with The Economic Times. (September, 2016)
 FORBES INDIA – Collector’s Edition (issue dated 21st December, 2016) featured Mr. R S
Agarwal and Mr. RS Goenka on THE 100 RICHEST INDIANS, ranking them at the 84th
position. (October, 2016)
 In a Special Issue by Business Today, Shri R.S. Agarwal featured in the 5th Annual List of
India’s Top 100 Best CEOs. (December 2016)
 Emami features at No.30 as ‘Radheshyam Agarwal & Family’ - comprising the market cap
of Emami Ltd., Emami Infra, Emami Paper and Zandu Realty India’s Super Rich 2016
by Businessworld. (December, 2016)
 Mr. R.S. Agarwal and Mr. R.S. Goenka have been conferred with the Degree of D.Litt.
(Honoris Causa) by KIIT University, Bhubaneswar for their multifaceted contribution to
business and society. (February, 2017)
 Mr. R.S. Agarwal and Mr. R.S. Goenka were ranked on the 30th position in the BS
Billionaire Clubranking for their rise in wealth from Rs16,551 cr on January 2016 to Rs
17,460 cr on January 2017. (February, 2017)
 Mr. N H Bhansali, CEO – Finance, Strategy & Business Developement & CFO, Emami
Limited, has been selected in CFO India’s 7th Annual CFO100 Roll of Honour. Mr.
Bhansali won the award as the CFO of Emami Ltd in the category of ‘Mergers &
Acquisitions’ and was one of the 12 awardees in this category. (March, 2017)
 Mr. R.S. Agarwal and Mr. R.S. Goenka have been conferred with Super Icon Awards 2017
by Society Magazine for being business visionaries. (March 2017)

Global business

Overseas operations

 Emami markets personal and health care products across 60 countries, with primary
focus in Gulf & Middle-East, CIS, SAARC, Africa and SEA regions. We have
dedicated manufacturing units in India and abroad to develop products suited to meet
the diverse needs and preferences of consumers in different markets.
 360.00
Emami Limited 1.64%
As on 00

Home Financial Shareholding Board Trading

Results Pattern Meetings History

Price Watch

Premi
Turnov um
Best Orders
er* Turn
over

(
Securit Buy Buy Sell Sell (
LTP lakhs
y Qty Price Price Qty lakhs)
)
EMAMILTD : High :
Equity 360.0 359.9 3474.9 Note
- - 3711 - 362.90 / Low : 348.00
Shares 0 5 4

Most Intraday Stock with Quart

Active - - - - - - - Stock Index erly
Futures

Most
Active
- - - - - - -
Call
(-) -

Most
Active
- - - - - -
Put
(-) -
Most
Active
Nifty
50 1075 10751 10752 152895
75 600 -
Futures 0.00 .75 .20 0.87
28-
FEB-
2019

Most
Active
Nifty
-
Midcap
50
Futures

* In case of Option Contracts "Turnover" represents "Notional

Turnover"

Company Information Corporate Actions Announcements

Emami Limited Ex-Date Purpose - Updates Feb 01,

Date of Listing (NSE) 25-Jul-2018 : ANNUAL GENERAL 2019, 17:43
: 03-Aug-2006 MEETING - Updates Jan 31,
Face Value : 1.00 21-Jun-2018 : BONUS 2019, 17:45
ISIN : INE548C01032 1:1/DIVIDEND- RS 7 - Updates Jan 31,
Industry : PERSONAL PER SHARE 2019, 17:41
CARE 26-Jul-2017 : ANNUAL GENERAL - Press Release Jan 31,
Constituent Indices MEETING/DIVIDEND- 2019, 17:38
: ,NIFTY FMCG,NIFTY RS 5.25 PER SHARE - Outcome of Board
MIDSMALLCAP 14-Mar-2017 : INTERIM DIVIDEND Meeting Jan 31, 2019,
400,NIFTY 500,NIFTY RS 1.75 PER SHARE 15:10
MIDCAP 150 (PURPOSE REVISED)
26-Jul-2016 : ANNUAL GENERAL
Issued Cap.
MEETING/DIVIDEND
: 453935238(shares) as
- RS.7/- PER SHARE
on 15-Feb-2019
Free Float Market Cap.
*: 4411.64(Cr)
Impact Cost: 0.11 as on
Jan-2019
52 week high/low price
: 600.00/336.20
* Free-float market
capitalization as on the
previous trading day.

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Contact us

Registered office: Kolkata

Emami Limited
Emami Tower
687 Anandapur,
EM Bypass
Kolkata 700107
West Bengal

P: +91-33-6613 6264 Click map to enlarge

F: +91-33-6613 6600
 V CHAPTER

 Marketing strategies
 Human resource strategies
 Financial strategies
 Annual Report
 Corporate Goverance
 SWOT Analysis
Marketing Strategies

Emami Marketing Strategies

Emami is a public company associated with FMCG sector. It is of Indian origin and has its
headquarters base in Kolkata in India. Emami deals in healthcare and personal care sector and
was established in the year 1974 by its founders R.S. Goenka and R.S. Agarwal. It has
targeted middle-class section of society as its potential customers. Some of its main rivals in
consumer market are as follows-Marico,Nestle,HUL

Product in the Marketing Mix strategies of Emami :

Emami has projected its products as organic, natural and herbal and created a product
portfolio that is immensely popular in the consumer market. It has several sub-brands that
have products to their name. It includes- Boroplus brand includes Prickly Heat Powder,
Antiseptic Cream and Total Results Moisturizing lotion

Zandu Brand includes Gel Balm Junior, Balm Ultra Power, Balm

Navratna brand includes i-Cool Talc, Cool Talc, Almond Cool Talc, Extra Thanda, Cool Oil

Fair and Handsome brand includes Complete Winter Solution, Instant Fairness Facewash,
Fairness Cream for Men

Fast relief includes Pain Relief Ointment

Menthol Plus includes Balm

Zandu Sona Chandi includes Chyawanprash Plus

Vasocare includes Herbal Lip Balm and Herbal Skin Jelly

Kesari Jivan includes Chyawanprash

Zandu Healthcare includes Ethical and Classical

7 Oils in One includes Damage control Hair Oil

Kesh King includes haircare products

Emami Golden Beauty includes Talc

He includes deodorants

She Comfort includes Sanitary Napkins

Emami Naturally Fair includes Herbal Fairness Cream.

Marketing Mix Stratagies of Emami

Place in the Marketing starategies of Emami :

Emami has been successful in creating an international presence that has spread to sixty
countries of the world in SAARC, CIS and GCC regions including countries like Nepal,
Russia and Ukraine. It has offices in Kolkata, Mumbai, New Delhi, UAE, Moscow and
Singapore. Emami has one overseas unit in Bangladesh and seven manufacturing plants in
India including Abhoypur, Kolkata, Amingaon, Vapi, Pantnagar, Dongari and Massat. The
brand has an extensive and exclusive distribution network in India that includes both rural
and urban sector and some of them are located at Agartala, Ambala, Bangalore, Bhiwandi,
Chennai, Delhi, Guwahati, Indore, Jammu, Jaipur, Kolkata, Patna and Varanasi.

Distribution channel of Emami is well-organised and for efficient and fast results it takes the
help of thirty-two depots, three thousand and five hundred distributors, sixty super-stockiest,
four thousand sub-distributors and five lakhs direct retail stores. It also has a tie-up with ITC
Ltd for distribution of its merchandise via e-choupal outlets. Emami products are easily
available at departmental stores, general stores, corner shops, super stores, chemists, beauty
parlours, salons and almost all retail outlets in India.

Price Mix in the Marketing Mix strategies of Emami :

Pricing policies can make or break a company. Emami owes its success mainly to its pricing
policies which have helped the company to penetrate both urban and rural market with equal
success. The company has launched its products in various quantity packs to make them
reach every section of society. It has adopted a reasonable pricing policy which makes
products affordable to general masses. It provides discounts and incentives to its customers so
as to retain their loyalty and create huge sales. High volumes result in greater revenues for the
company making it one of the best-known brands in the industry.
Promotions in the Marketing strategies of Emami

Emami is one of the most popular brands and has created a marketing strategy that is heavily
dependent on celebrities and good commercials. Shahrukh Khan has been roped in to take
part in Fair and Handsome commercials, Amitabh Bachchan and Sonakshi Sinha for
Boroplus products, Hrithik Roshan for products of brand He, Juhi Chawla for Kesh King
products.

Emami has both superstars Amitabh Bachchan and Shahrukh Khan endorsing same brand
Navratna. Kareena Kapoor and Kangana Ranaut have also been part of brand Emami at one
time or other. Advertisements are shown on television channels like Star Plus, Zee Cinema,
Sony TV, colours along with sports channel for maximum coverage. Radio, newspapers,
magazines and hoardings are also used extensively for marketing of Emami products.

Hr Strategies

Each organisation has three basic components that target people and structure. A human
resources management (HRM) to study the activities of people working in an organisation.
HRM is the management of people working in an organisation. It is particulary relevant to the
person who can say that people manage. Leadership of organisations to their needs and helps
the organisation resolution. HRM seeks to how people can be managed within the
organisation. He is responsible for hiring people to train to organize the command, the
benefits of their work problems and recommend appropriate. Are about writing with us then
please check our freelance writhing jobs page.

Staff development

Development and staff development for Emami ltd of growth for emami. Emami recognizes
that population growth is supported by large asset management. A Emami aims to enhance
motivation and personal development of its employees worldwide through learning by doing,
as well as acess to a variety of programs tailored to local needs, including education of any
background degree, management training and training to build capacity and skills of
employees.
Developing leader

Emami recognies the importance of cultivating leadership qualities and aims of international
respect for different cultures and working environments. Emami has implemented a series of
initiatives to bring the full potential of employees to meet and the next generation of business
leaders worldwide to promote.

 Training programs for employees

 Health and safety
 Employee health and flexible work styles

Other strategies

Sales & Distribution

Direct retail reach increased to more than 8.5 lac outlets (previous year: 7.3 lac).

Rolled out SAP-enabled handheld devices to the urban sales force

Added ~500 salesmen to improve direct coverage and enhance execution

capability at the point of sale

Extended coverage from 12000 villages in FY 16-17 to ~25000 villages across the

country with a population of 5000 and above

Sharpened focus on the Modern Trade Channel as a key growth driver.

Focused on the e-commerce channel

Human Resources

Implemented SAP Success Factors for the automation of HR services

Strengthened the Performance Management System

Information Technology

Continued to invest significantly on IT platforms

Automation of business processes included product costing and

profitability analysis, improving speed and real time product margin

management decisions with accuracy

Research & Development

Kick-started a project in collaboration with the Institute of

Bio-Resources Sustainable Development, Imphal, for cultivating

endangered plants

Operations

With the commissioning of the Pacharia plant in Assam, Emami secured

fiscal benefits for ten years. The fully-automated plant, set up at a cost of

H300 crore, is GMP compliant Kick-started a third party unit in Sri Lanka for manufacturing
countryspecific products

Fiancial Strategies

The Overall financial situation of Emami india seems to be steady with a little of
improvement from Financial reviewkey performance metrics h croreparameters 2016-17
2017-18revenue from operations* 2,689.1 2,823.4reported revenue 2527.7 2540.8* like to
like revenue growth (i.e. including gst/vat)

analysis of the profit and loss statement while sales did increase from previous years, the rise
in costs and expenses was not proportionate to the rise in sales.

Revenues: the revenues from operations of thecompany reported growth (including gst/vat)
of

5.0%. the growth slowed during the year primarily dueto the implementation of the goods and
services tax.other income accounted for 0.76% of the revenues.other income as a proportion
of net profit stood at6.3% in fy18 against 9.1% in fy17.expenses: total expenses of the
company increased3.0% from h1,768.61 crore in fy17 to h1,821.39 crorein fy18 on account
of an increase in a&p spends andstaff costs. cost of goods sold, comprising 32.3% ofthe
company’s revenues in fy18 ( 32.9% in fy17) , The only problem is it has decreased by a
great deal despite an increase in the price ofkey raw materials like menthol and vegetable
oils.employees’ expenses, comprising 10.0% of the totalrevenues.

Margins:

Despite low sales growth, strong cost controlhelped the company protect margins during the
yearunder review. while gross margins increased 60 basispoints, ebidta margin declined 170
basis points from30.03% in fy17 to 28.32% due to sustained investmentsin new launches,
which increased 5.5x (to h62.7 crore)during the year under review.analysis of the balance
sheet sources of fundscapital employed: the capital employed of thecompany increased 4.3%
from h2,257.2 crore as on 31stmarch 2017 to h2,354.8 as on 31st march 2018. Return

on capital employed stood at 26.30% in fy18.

the net worth of the company increased 14.76%from h1,754.70 crore as on 31st march 2017
to h2,013.61crore as on 31st march 2018.

long-term debt-equity ratio of the company stoodat 0.16 in fy18 compared to 0.27 in fy17. net
loanreduced by h271 crore despite capex of h131 crore.

Finance cost:

finance costs of the companydecreased 40.9% from h58.01 in fy17 to h34.31 in fy18

due to repayment of liabilities. the company’s interestcover stood at a comfortable 20.97x in

fy18 (13.09xin fy17), reflecting a comfort in servicing interestoutflow.applications of
fundsfixed assets (gross) of the company increased 5.14%from h2,572.88 crore as on 31st
march 2017 to h2,705.15crore as on 31st march 2018 largely owing to capexin the new
pacharia plant. depreciation on tangibleassets increased 43.5 % from h46.89 crore in fy17 to

h67.28 crore in fy18.

Investments

non-current investments of the company increased from h94.36 crore as on 31st march 2017
to h185.53 crore as on 31st march 2018 due to increase in fair valuation.
Working capital management

• current assets of the company increased 58.9% from h440.92 crore as on 31st march 2017
to h700.76 crore as on 31st march 2018 owing to growing scale of international business.
current ratio and quick ratio stood at 0.98 and 0.71 respectively in fy18 against 0.56 and 0.33
in fy17. • inventories including raw materials, work in progress and finished goods, among
others, increased 8.3% from h17,915.56 crore as on 31st march 2017 to h19,395.48 crore as
on 31st march 2018. Inventory stood at 28 days of turnover equivalent in fy18.

• growing international business volumes resulted in an increase of 60.7% in trade

receivables from h97.01 crore as on 31st march 2017 to h155.89 crore as on 31 stmarch 2018.
the company contained debtors’ cycle within 22 days of turnover equivalent in fy18.

• cash and bank balances of the company increased 58.9% from h50.05 crore as on 31st
march 2017 to h79.51 crore as on 31st march 2018

The quick is no better. The quick ratio shows that most companies in the industry not only
have less current liabilities and more current assets, but it is also shows that these companies
have much more inventory than Emami india does. The difference between the two is greater
for the industry than it is for Emami. This is a good reason why Emami ltd inventory turnover
is much higher than the industry norms.

It has been steady growth in all aspects of the company expect for net incom, but that is due
to a large part, accounting change. Right now Emami is in strong financial health and has no
signs of getting worse any time soon.
 Mar '18 Mar '17 Mar '16 Mar '15 Mar '14

12 mths 12 mths 12 mths 12 mths 12 mths

BALANCE SHEET

Sources Of Funds

Total Share Capital 22.70 22.70 22.70 22.70 22.70

Equity Share Capital 22.70 22.70 22.70 22.70 22.70

Reserves 1,948.54 1,689.86 1,328.20 1,189.46 906.00

Networth 1,971.24 1,712.56 1,350.90 1,212.16 928.70

Secured Loans 57.82 24.90 30.00 8.38 16.29

Unsecured Loans 221.55 109.80 630.00 0.00 0.04

Total Debt 279.37 134.70 660.00 8.38 16.33

Total Liabilities 2,250.61 1,847.26 2,010.90 1,220.54 945.03

Mar '18 Mar '17 Mar '16 Mar '15 Mar '14

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 1,855.05 1,986.89 2,144.28 589.47 520.74

Less: Accum. Depreciation 138.80 79.41 202.36 165.52 147.09

Net Block 1,716.25 1,907.48 1,941.92 423.95 373.65

Capital Work in Progress 77.12 64.84 0.00 24.97 8.44

Investments 315.32 128.15 19.00 501.73 296.31

Inventories 183.85 169.20 143.14 118.45 136.62

Sundry Debtors 70.03 34.13 52.01 56.90 75.22

Cash and Bank Balance 21.55 8.53 72.56 326.09 264.84

Total Current Assets 275.43 211.86 267.71 501.44 476.68

Loans and Advances 213.76 128.64 214.19 103.78 105.38

Total CA, Loans & Advances 489.19 340.50 481.90 605.22 582.06

Current Liabilities 307.09 547.95 257.89 213.79 178.08

Provisions 40.18 45.76 234.28 121.55 137.36

Total CL & Provisions 347.27 593.71 492.17 335.34 315.44

Net Current Assets 141.92 -253.21 -10.27 269.88 266.62

Total Assets 2,250.61 1,847.26 1,950.65 1,220.53 945.02

Contingent Liabilities 103.62 109.31 137.17 116.95 107.48

Book Value (Rs) 86.85 75.45 59.52 53.41 40.92

Source : Dion Global Solutions Limited

Annual Report

Particulars 2017- 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-
18 09

A.OPERATING RESULTS

Revenue 2,82,3 2,68,91 2,54,42 2,19,32 1,83,04 1,70,54 1,45,85 1,25,16 1,04,85 76,79
from 40 1 1 7 2 1 5 4 6 6
operations
including
GST/VAT

Revenue 2,54,0 2,52,77 2,39,75 2,06,76 1,72,76 1,60,99 1,38,11 1,18,77 1,00,75 73,63
from 83 4 5 7 5 6 6 4 1 3
operations

EBIDTA 71,94 75,913 68,727 54,312 44,704 34,968 29,604 25,443 24,454 12,94
4 6

PBT 39,37 42,362 42,277 58,899 46,753 37,461 29,621 27,012 20,430 10,63
7 0

PAT (after 30,71 34,042 36,353 48,215 41,287 32,067 25,612 22,972 16,920 9,224
minority 4
interest and
associate)

Cash profit 61,92 64,900 61,846 51,646 44,804 34,264 27,492 24,371 18,463 10,05
1 9
Dividend 19,12 19,122 19,122 18,817 18,588 14,162 14,069 6,175 5,311 3,983
including 2
tax

B. FINANCIAL POSITION

Fixed 1,82,84 2,01,12 2,03,70 47,759 40,777 43,965 48,034 49,094 56,729 64,94
5 2 5 6
assets
(Net
block)

Liquid 12,806 3,332 1,193 49,657 28,922 15,634 7,356 - 5,500 3,267

investme
nt-s

Other 84,423 55,862 64,324 73,455 60,530 62,018 61,927 60,635 43,125 24,95
2
assets

Total 2,80,07 2,60,31 2,69,22 1,70,87 1,30,22 1,21,61 1,17,31 1,09,72 1,05,35 93,16
4 6 2 1 9 7 7 9 4 5
assets

Share Capital

- Equity 2,270 2,270 2,270 2,270 2,270 1,513 1,513 1,513 1,513 1,313

- Preference

Reserves 1,99,09 1,73,20 1,58,89 1,28,93 87,401 76,348 77,023 68,336 62,357 29,51
and 1 0 1 4 0

surplus

EBIDTA (H lac) 2013-14 2014-

15 2015-16 2016-17 2017-18
80,000
70,000
60,000
50,000
EBIDTA (H lac) 2013-
40,000
14 2014-15 2015-16
30,000 2016-17 2017-18
20,000
10,000
0
1 2 3 4 5

Revenue (H lac) 2013-14 2014-

15 2015-16 2016-17 2017-18
300,000
250,000
200,000
Revenue (H lac)
150,000 2013-14 2014-15
100,000 2015-16 2016-17
2017-18
50,000
0
1 2 3 4 5
 Domestic Region-wise Contribution
(FY18) South 19% South 28% East
20%
Domestic Region-wise Contribution (FY18) South 19% South 28% East 20%

100%
50%
0
0%

1
Corporate Governance

Company’s philosophy on corporate

Emami firmly believes in adhering to established corporategovernance practices in order to

protect the interests of investorsand ensure healthy growth of the Company. The
Companystringently complies with the corporate governance practices asenumerated in the
Securities and Exchange Board of India (ListingObligations and Disclosure Requirements)
Regulations, 2015{hereinafter referred to as the SEBI Listing Regulations}.The Company
lays a strong emphasis on ethical corporate citizenshipand the establishment of good
corporate culture. The corporategovernance process and systems has gradually strengthened
overthe years. The objective of an e¡ective Corporate Governancemechanism according to a
global consensus entails long-termmaximization of shareholders’ value. Pursuant to this
objective,the Company’s management and employees have manufacturedand marketed
products which have created long-term sustainablevalue for consumers, shareholders,
employees, business partners,the society and the economy as a whole. The Company at
thesame time ensures full compliance with regulatory disclosurerequirements.

The Company further believes that the concept of corporategovernance is founded upon the
core values of transparency,empowerment, accountability, independent monitoring
andenvironmental consciousness. The Company has always givenits best e¡orts to uphold and
nurture these core values across alloperational aspects. As a means to this end, the Company
formeda Board comprising reputed experts, and inducted persons ofeminence as Independent
Directors. These people contribute tocorporate strategizing and provide external perspectives,
whereverappropriate.
SWOT Analysis

Strengths 1. Its strategy is to develop niche segments into brands which have always
given it the first mover’s advantage. It did just that with its men’s fairness
cream — Fair and Handsome — as it carved out a virgin segment from
within what is now a Rs 1,400 crore fairness cream market in India.

2. Emami covers all the states with 32 depots across India and enjoys a wide
distribution network comprising strong network of 3500 distributors and
4000 sub distributors , with direct retail reach across of 5,00,000 outlets

3. Strong brands in its portfolio; Boroplus, Navaratna, Fair & Handsome,

Zandu are all Rs 100 crore plus brands.

4. Significant international presence in countries like Ukraine, Russia and

Nepal

Weaknesses 1. It has not diversified much. It had planned to enter into baby care segment
but later on pulled back.

Opportunities 1. Demographic trends like increasing population and purchasing power

favour the consumer healthcare market, thus opportunities for growth.

2. Related diversification into growing categories

3. With growth in modern retail, it should look into opportunities of how to

cater to this channel

Threats 1. Intense and increasing competition amongst other FMCG companies.

2. FDI in retail thereby allowing international brands and increasing
bargaining power of big retailers which could negotiate for better margins.
3. Competition from unbranded and local products

V CHAPTER

 FINDINGS
 SUGGESTIONS
 CONCLUSION/SUMMARY
 BIBLIOGRAPHY
 FINDINGS

1. In this organisation there is good employer-employee relationship.

2. It was observed that the company targets 100% of its employees and make them to
be involved in its continuous improvement along with different activities by
motivating them through various financial and non-financial incentives.
3. Emami has not got a foothold in the luxury trucks segment in its domestic market.
4. Emami not given much importance for promotion of their products.
5. The company is increasing its global foot print by entering overseas markets.
 SUGGESTIONS

 To meet the customer expectations company need to improve their product

innovation.
 To motivate the worker, new program should be organized.
 To meet the 100% target the employer and employee interaction must be compulsory.
 The company should concentrate more on the luxury truck segments to keep a strong
hold in the market.
 The company should earmark more money for the advertisement and sales promotion
of the product. It helps to increase the brand awareness and image.
 CONCLUSION

After searching and reading a lot about emami india. I have concluded and highlighted some
of the most prominent aspects of the company.

Emami Ltd has been fortifying its place as a leader in cosmetics products for more than
decades in india. Emami fmcg products has played a vital role in meeting the target volumes
for market expansion. Its has provides a quality products with maximum 99% natural care
of products.

The financial performance of the company for the 10 years is analyzed and it is proved that
the company is financially sound.

So, It is the largest cosmectic and natural herbal making product company in the entire world
which helped me a lot of searching info about company on the internet. I mean they have a
very sophisticated and well updated website so that whatever stuff what I needed was there.

And finally my project of business analysis conclusion is therefore I worked hard and overall
it was a good experience for me.
 BIBILIOGRAPHY

WEBSITES:

 www.google.com
 https://www.ibef.org
 www.emamilid.in
 www.emamigroup.com
 https://en.m.wikipedia.org