Mr ADI GODREJ'S PECULIAR PROBLEM
Article Abstract:
The sales of Godrej Soaps increased by 26 percent to Rs768 crore in 1997-98 but profits declined by 66 percent to Rs8.5 crore. The sales of Godrej Foods increased by Rs1 crore to Rs274 crore in 1997-98 but it showed a loss of Rs18 crore which wiped out about 50 percent of its net worth. Analysts say that Mr Adi Godrej, chairman of the Godrej Group, has taken a wrong decision by selling his distribution network to multinational companies and tying up with Sara Lee and Pillsbury. Procter & Gamble tied-up with Godrej Soaps but utilised the latter's distribution network to push its own products. This resulted in the marketshare of Godrej Soaps falling to 6 percent from 13 percent before the tie- up. Godrej has given a 51 percent stake in Godrej Hi Care to Sara Lee but analysts feel that once Sara Lee brings in more products into the country, Godrej's products will suffer. Godrej Pillsbury, the joint venture with Pillsbury of the US, acquired the distribution network of Godrej Foods for Rs28 crore. Analysts feel that Pillsbury, which has only a few products like Pillsbury wheat flour, cake mixes and sweet corn, will stop promoting Godrej products after its own brands are established. (khr)
Publication Name: BusinessWorld
Subject: Business, international
ISSN:
Year: 1998
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JUST WHO IS CHINTAN PARIKH?
Article Abstract:
Mr Chintan Parikh, chairman of the Rs450 crore Group Ashima, has increased the net profit of his group to Rs34.4 crore in 1997-98 from Rs6.7 crore in 1993-94. The group's turnover has increased to Rs450 crore in 1997-98 from Rs55.7 crore in 1993-94. Ashima Syntex, the flagship of the group, acquired Ahmedabad New Cotton Mills (ANCM) which had liabilities of Rs20 crore, from the Board for Industrial and Financial Restructuring for one rupee in 1997. Mr C Parikh plans to invest Rs150 crore and use ANCM to increase his denim capacity to 14 million metres per annum. Raising the funds will not be a problem as the net worth of Ashima Syntex was Rs223 crore as on June 30, 1998. Mr Parikh sold a 6 percent stake in Ashima Syntex to Cone Mills of the US in September 1998 for Rs16 crore. This tie-up with Cone Mills is expected to increase Group Ashima's exports to Rs350 crore in 1998-99 from Rs100 crore in 1997-98. (khr)
Publication Name: BusinessWorld
Subject: Business, international
ISSN:
Year: 1998
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