Premji’s FMCG company a dragon in tiger economies


June 25, 2014

Anshul Dhamija, The Times of India

Bangalore, 25 June 2014

Tech tycoon and Wipro chairman Azim Premji is a hidden dragon springing out an impressive fast-moving consumer goods (FMCG) story in Asia’s new tiger economies, knocking close on the heels of global powerhouses Unilever and Proctor & Gamble (P&G).

Billionaire Premji’s Wipro Consumer Care and Lighting (WCCLG) is now among the top three personal care companies in Malaysia and Vietnam and is gaining ground in China’s southern provinces. Sixty-eight-year old Premji — with personal wealth topping $15 billion — took the FMCG unit private through a de-merger of non-IT businesses, which are housed under Wipro Enterprises.

"Our internal estimates suggest that Unilever is number one in personal care in Malaysia followed by us. We are currently placed number three behind Unilever and P&G in Vietnam’s personal care market," Wipro Consumer Care & Lighting President Vineet Agarwal told TOI.

In Malaysia, which is among the top three South East Asian economies, Wipro enjoys market leadership in facial cleansers (27%), facial moisturizers (26%), fragrance (22%), talc (51%) and kids toiletries (60%)."We are also the number one with a 50% market share in halal toiletries," added Agrawal, a Wipro veteran who has overseen the company’s inorganic expansion globally.

Wipro Consumer generates more than 50% of its revenue from international markets through a string of acquisitions boosting its foot print across south east Asia, Middle East and Africa. In doing so, it notched up Rs 5,000 crore revenues in FY14, becoming the third largest India born FMCG major after Godrej Consumer Products (Rs 7,602 crore) and Dabur (Rs 7,094 crore).

WCCLG’s revenue grew 16 times from Rs 304 crore reported 13 years ago. It went past Marico’s consolidated revenue of Rs 4,686 crore in the last fiscal. India and international markets posted similar growth giving the Wipro unit 17% revenue growth and 11.4% expansion in operating profit.

"Wipro has been a successful consumer products company. However, the consumer business got lost in the shadow of its bigger and sexier IT business. The origins of Wipro are in consumer products and that is hidden in its name, which is an acronym," said Devangshu Dutta of Third Eyesight, a consultancy firm.

Wipro – Western India Products Limited was set in 1945 to manufacture vegetable and refined oils, which the company has exited from.

Over the last decade Wipro has spent more than $500 million acquiring international brands like Yardley, Woods of Windsor and Enchanteur among others. "Malaysia is our biggest international market for us followed by China, Vietnam, with Indonesia and Middle East almost at same levels. We are in all developing countries in Southeast Asia and want build in these countries," added Agrawal.

Santoor with revenues of around $240 million (roughly Rs 1,500 crore) is still the biggest brand in WCCLG portfolio, followed by Enchanteur ($130 million), Yardley ($50 million), halal brand Safi and skincare brand Bio-essence (at $50 million each). Enchanteur, Bio-essence and Romano (a male toiletry brand) are market leaders in ASEAN countries.

Agarwal is focused on improving the China show, an ambitious play which no other Indian FMCG company has dared till now. "We are buoyant on China because it’s a country that’s still developing, it’s a large market and if you can play your cards right you can make money there and expand," said Agarwal.

(Published in The Times of India.)