Wednesday, May 5, 2010

Indian Emami plans to buy Egyptian firm in 3-4 weeks to enhance their manufacturing base overseas

May 3, 2010 /India PRwire/ -- The broadened Emami Group, which makes personal care and consumer care brands under Emami Ltd, decided to get hold of an Egyptian personal care products maker within next 3-4 weeks, a top official said on Tuesday. This step is part of the group's corporate strategy to strengthened Emami's growth at an accelerated rate of 50-60% CAGR over the next three years.

Speaking to ET, Emami director-international business Prashant Goenka said: "We are in an advanced stage of negotiations with the owners of the company and hope to clinch the deal soon. It has a 1,00,000 sq ft of construction area in Egypt.

Its a personal care company in Egypt whose manufacturing facilities we are acquiring..Most of Emami's skincare products will be manufactured there."

"We will take about a month to finalise the next 3-4 weeks," he added.

He did not provide the name of the firm or the deal size, but said the buy will add 60-70 percent to Emami Ltd's international revenues. He said, "The deal size will be small because we are not buying a brand, but a small company. If the talks fructify, we hope to commence operation in the current fiscal itself," he added. The buyout will be funded by a mix of internal accruals and term loans from lending institutions. He, however, refused to give any further details, including the deal size or the capacity of the facility. Incidentally, it has roped in an Egyptian consultant as well as a MNC to advise them on the deal. Elaborating on Emami's ambitious growth outlook and rationale behind the move, he said: "The company has been seriously looking to invest in the region to enhance our business primarily because of a rising population, predominantly youth, increasing demand for personal healthcare products and improved purchasing power."

The firm also plans to begin manufacturing its products in Egypt by the end of the current fiscal, Goenka added.

"We also feel that a regional manufacturing base will help us to become a leading player in this market. We have already reach out in the Middle East, CIS, Europe, North America and Africa, clocking a growth of over 50% from these markets and contribute about 20% to Emami's total turnover," he said.

Emami is also looking at Nigeria and South Africa next to acquire assets, in a bid to boost its presence in the African continent, he said.

The acquired unit will manufacture products targeting the Common Market For Eastern and Southern Africa and Arab League, comprising portions of north, east and central Africa, which provides special duty concessions. Besides, it will provide on time delivery.

Emami is manufacturer of Fair and Handsome Men Range product and having wide spread distribution in Middle Eastern and African countries.