ET 500 2011: Our goal is to be a Rs 10,000 crore company by 2020, says Ulhas Kamath, Deputy MD, Jyothy Labs

At a time when FMCG companies in India are set to ride high on the consumption growth bandwagon, small-sized Jyothy Laboratories is well-placed to emerge as a leading consumer goods firm. The company’s acquisition of Henkel India will help it gain global understanding and grow its portfolio, says Ulhas Kamath, deputy managing director, Jyothy Labs. Edited excerpts:

Where do you see the company ten years from now?

Our goal is that by 2020 we want to be a Rs 10,000-crore company. This culminates into an annual CAGR of 25% over the next eight to ten years.

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What do you see as the key challenges in the next ten years?

One is globalisation. In the past, an Indian company with Indian products was meant for Indian people. Now Indians want what is available in the world at an Indian price. The second challenge is modern trade and private labels. Private labels as seen in the West commoditise branded products. So, one needs to be careful about that as it has already happened in the West.

The third challenge is that of reach. People want products to be made available next door. It will be a challenge for marketers to make their products available across all retail outlets. Meeting the needs and expectations of the younger generation is yet another challenge. Innovation is also a challenge. In the past, innovation in India was imitation of the West. But now, one needs to be really innovative. Indian players need to have their own customised innovation.

What will be your strategies to overcome these challenges?

The first strategy will be to gain global understanding. That is one of the reasons why we were so keen to acquire Henkel. Its products are sold in 80 countries. With 135 years of experience, we can definitely learn a lot from Henkel in terms of global perspective.

As far as reach is concerned, we are already directly covering 1 million retail outlets. But our products are available in over 3 million outlets. The products we are going to launch in future are primarily keeping in mind what the younger generation wants. A lot of R&D products are in the pipeline from categories such as fabric care, personal care and surface cleaning segments.

Henkel’s product range will give an international touch to our portfolio. Besides, we are creating a new management team with separate category heads who have global as well as Indian experience. The new members will start coming into the company from January 2012. About 25% of Henkel’s turnover comes from modern trade, while for Jyothy this proportion in only 3%. Now we are routing Jyothy’s portfolio along with Henkel’s products in modern trade due to which our presence will increase.

How do you see competition - especially when all your peers have great visions to grow?

Competition wise I will be more worried about Indian companies such as Godrej, Dabur, Emami, CavinKare or Marico. Indian companies do extremely well as they are able to adapt to Indian conditions fast. They are able to take decisions quickly and execute fast. For multinationals, India is just one of their markets. But I know for sure that the Levers and P&G have their own business programme for India and they do have a lot of money to execute that. But the speed at which they can execute like Indian companies is far slower.

What are your plans for the laundry business?

As of now we have 125 retail outlets across the country and we are one of the biggest. We have a monthly billing beyond Rs 4 crore. Within three years, we will have 300 retail outlets with an annual turnover of Rs 250-300 crore and a profit margin of 10-15%. We will be present in all the major 30-40 cities.In ten years, I see ten more players and JFSL will be one of them.