Acquisition in Vietnam to see significant market growth in next 3-4 years: Saugata Gupta, CEO, Marico ltd

Saugata Gupta: We had mentioned the turnover of Vietnam would be around in the range of 100 and 120 crore but as I said that we will be on a investment and growth phase there, so the market in Vietnam is also low penetration market and growth market so they would be over the next three-four years significant growth in that business.

ET Now: You have also indicated earlier that you are scouting for further acquisitions, so what size are you targeting and which of the companies are you in talks with if any?

Saugata Gupta: We do not comment on anything ongoing work or M&A. As far as size is concerned we have always said I think it has to have a strategic fit. The valuation needs to be attractive and therefore it is not the question of size but as a question of the strategic fit and the valuation rather than the size because that size comes later.

ET Now: Marico is no longer interested in buying the Australian UNIBIC biscuits is that an indication that Marico is no longer serious about their venture in the biscuit industry?

Saugata Gupta: We do not comment on speculation as I said that therefore those were we did reports, so therefore we do not comment on things which perhaps which never fructified or things which are work in process or anything on M&A space. So on specific to UNIBIC I have nothing to add.

ET Now: You were earlier also planning to up your marketing budget, what is the kind of ad spend allocation that you demarked?

Saugata Gupta: If you really look at our ad spends we believe rather than having a quarterly kind of a number we look at a more of an annual number. We expect the annual number to be in the range of 11% to 12%. So we do not see any reduction neither any significant increase in our ASP, ANP as a percentage of sales. It will continue to be in the region of 11% to 12%.

ET Now: What about new launches which are there in the pipeline?

Saugata Gupta: We are in the process of prototyping some of them and we have extended some of them like in south we have got a cooling oil and ayurvedic hair fall oil and oats which we have now put in certain limited markets. So these are the categories we will invest in this year and may be towards the end of the year there could be one or two other new initiatives.

ET Now: Given the current inflationary environment and rising copra prices as well which indeed is your raw material do you plan to take further price hikes?

Saugata Gupta: See if you really look at the inflationary situation now as far as the peak of the raw material pricing is concerned with reference to copra and other inputs we believe the worst is over and copra prices are likely to perhaps soften. Now how much they are going to soften and what is the time frame it is difficult to say. Now the only joker in the pack is crude prices and crude prices are unfortunately not necessarily led by basically macroeconomic factors but they are also led by geopolitical factors. Now if crude currently is hovering around $100, if crude continues at this level we do not see the need for any further price hikes. – Indiatimes