Jyothy Laboratories in talks to acquire laundry detergent brand Safed

MUMBAI/KOLKATA: Jyothy Laboratories (JLL), which owns brands such as Ujala and Maxo, is in advanced stage of talks with West Bengal-based detergents and allied products company Safechem Industries to buy its flagship laundry detergent brand, Safed.

The deal is estimated to be Rs 70 crore, according to two people familiar with the transaction. The due diligence process has been going on over the last three months and both the companies recently discussed their distribution synergies, say the sources.

While Jyothy Laboratories spokesperson declined to comment, Safechem Industries denied the development.
Kolkata-based JLL, which manufactures and sells a range of laundry care products such as washing powder, detergent cake and fabric whitener, enjoys a strong brand equity in the eastern part of India.

Experts feel that the acquisition could be an entry strategy for the company into newer markets as its flagship brand, Ujala, is primarily focused in south India. The company has already expanded its portfolio by extending Ujala into washing powder segment, and the strategy now is to enter markets across India, primarily by buying out smaller regional brands.

“For JLL to have a national presence, it will have to acquire strong regional brands as extending Ujala could be expensive in terms of marketing and distribution costs,” said Anand Shah, senior analyst, Angel broking.

HUL and P&G are majors players in the Rs 12,000-crore laundry care market, with 36.8% and 14.6% share, respectively. In the mass market space, strong players like Nirma and Ghadi are getting aggressive in terms of marketing and distribution. So, mid-premium segment is the only space where JLL can hope to expand.

The company is already the largest player in the fabric whitener space with more than 70% market share. Earlier this year, JLL raised Rs 228 crore through qualified institutional placement (QIP) with an aim to grow inorganically and become a national player.