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FMCG Industry

FMCG Industry

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Published by: Abhinav Singh Solanki on Feb 21, 2011
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FMCG Industry

FMCG industry, alternatively called as CPG (Consumer packaged goods) industry primarily deals with the production, distribution and marketing of consumer packaged goods. The Fast Moving Consumer Goods (FMCG) are those consumables which are normally consumed by the consumers at a regular interval. Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc. The industry also engaged in operations, supply chain, production and general management.

FMCG industry economy
FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is estimated to grow 60% by 2010. FMCG industry is regarded as the largest sector in New Zealand which accounts for 5% of Gross Domestic Product (GDP).

Common FMCG products
Some common FMCG product categories include food and dairy products, glassware, paper products, pharmaceuticals, consumer electronics, packaged food products, plastic goods, printing and stationery, household products, photography, drinks etc. and some of the examples of FMCG products are coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and cigarettes, watches, soaps etc.

product development. Growth In the last 10 years. purchasing. Job opportunities in FMCG industry FMCG industry creates a wide range of job opportunities. Carlsberg. which made this industry as a potential one are low operational cost. Unilever. Kleenex. human resources. marketing. diverse. With a better distribution reach. Population growth is another factor which is responsible behind the success of this industry. Reckitt Benckiser. Leading FMCG companies Some of the well known FMCG companies are Sara Lee. presence of renowned FMCG companies.Market potentiality of FMCG industry Some of the merits of FMCG industry. Procter & Gamble. operations. Nestlé. general management. This has primarily been due to high consumer spending leading to higher sale of premium products as well as companies reaching out successfully to rural India. the FMCG industry has reached a size of USD 25 billion from USD 9 billion. Pepsi and Mars etc. finance. Coca-Cola. This industry is a stable. strong distribution networks. General Mills. FMCG companies will garner USD 18 billion from rural India in 2010 versus just USD 5 billion in 2006 . supply chain. challenging and high profile industry providing a wide range of job categories like sales.

is worth above Rs 217 crore. Southeast Asia. 1. followed by Reckitt's Mortein at Rs 149 crore. ITC. and Ponds. HLL's Clinic and Sunsilk make it to the top 100. Godrej. chapattis by HLL. 4. 21.e. Vatika. ITC alone accounts for 60% volume market share and 70% by value of all filter cigarettes in India. Fair and Lovely. cheese. Dabur is among the top five FMCG companies in India and is a herbal specialist. Lifebuoy. Far East. India's largest foods company. aggregating Rs. Clinic is nearly double the size of Sunsilk. although P&G's Head and Shoulders and Pantene are also trying hard to be positioned on top. 4. aggregating Rs. Britannia also ranks in the top 100 FMCG brands. US$ 420 million) in 2005-2006. and so on. dominates the biscuits category and has launched a series of products at various prices. The foods category in FMCG is gaining popularity with a swing of launches by HLL. 8. The food category has also seen innovations like softies in ice creams. curd. This category seems to have faster development than the stagnating personal care category. Companies Hindustan Unilever Ltd. . NO. 3. There are 11 HLL brands in the 21. butter.. Goodknight from Godrej. Asian Paints is enjoying a formidable presence in the Indian sub-continent. has a good presence in the food category with its ice-creams. In the household care category (like mosquito repellents). With a turnover of Rs.THE TOP 10 COMPANIES IN FMCG SECTOR S. and just below the personal care category. Dabur Chyawanprash. Vicks. 3. 19 billion (approx. Hajmola and Real.799 crore or 54% of the personal care category. 7. The personal care category has the largest number of brands. Cigarettes account for 17% of the top 100 FMCG sales. Godrej and Reckitt are two players. i. 10. This category has 18 major brands. 9.637 crore. 2. inclusive of Lux. In the shampoo category. 5. Middle East. 6. Dabur has brands like Dabur Amla. Nestle and Amul slug it out in the powders segment. Amul. milk. ITC (Indian Tobacco Company) Nestlé India GCMMF (AMUL) Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries The companies mentioned above are the leaders in their respective sectors. ready to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. and others.

6 billion (USD 380 Million) Marico is a leading Indian group in consumer products and services in the Global Beauty and Wellness space.22. particularly those of vegetable oils.6 billion (around USD 513 million). and Gems. however denied on cutting down on retailers' margins. It had also raised the prices of its hair-colour products by 10 per cent around three months ago. with a turnover of Rs. I won't use the word aggressively. On the acquisition front. "We are looking for acquisitions. Godrej. he said the company is no longer aggressively looking out for prospective purchases after a spate of acquisitions last year. Latin American hair colour firm Issue Group and Argentina's Argencos. Eclairs. . he said: "It is difficult to predict how much. GCPL had seven acquisitions to its credit. . we will. in its forecast for the 2010-11 Budget. a major player in the FMCG segment. Asian Paints is India's largest paint company. today said it could hike soap prices in order to offset rising input costs. raised prices of its soaps by 3-5 per cent in early January. which sells soap brands such as Cinthol and Godrej No 1." Godrej said.15. If the raw material prices go up significantly. as well as raise service tax. although it continues to keep its option open. Last year. ranked Asian Paints among the 200 Best Small Companies in the World Cadbury India is the market leader in the chocolate confectionery market with a 70% market share and is ranked number two in the total food drinks market. When asked by how much the prices could go up. Caribbean. but it depends on how raw material prices will pan out. we need to take a price hike. when suitable acquisition comes our way. "Soap is one category which is affected because vegetable oil prices are rising. There could be further price increases.South Pacific. SMC Global Securities Ltd." Godrej Group Chairman Adi Godrej told PTI. in the forthcoming Budget to reduce the fiscal deficit. a report said. Current NEWS May hike soap rates to offset rising raw material costs: Godrej NEW DELHI: The Godrej group. USA. 5 Star. Forbes Global magazine. Africa and Europe." Godrej group firm Godrej Consumer Products Ltd (GCPL). Its popular brands include Cadbury's Dairy Milk. including the takeover of leading African personal care brand Tura from Nigeria's Tura Group . Excise hike of 2 pc likely in Budget 2011: SMC The government is likely to increase excise duty by 2 per cent in sectors like FMCG and automobiles. but we are looking for it. said that service tax is expected to be hiked to 12 per cent from the current level of 10 per cent. The Rs. We are meeting it by efficiency in manufacturing and distribution and by some price increase.

the government had extended the concessional export finance regime till March 31. infrastructure and education. it said the Finance Minister is unlikely to extend the interest subsidy of 2 per cent. besides increasing service tax.500 crore. India is likely to resort to pre-crisis fiscal and monetary policies from April.000 to Rs 40. In 2011-12.000 crore to the Mahatma Gandhi NREGA. onward." SMC Group Managing Director Subhash Aggarwal said. it said. In a bid to support agriculture growth. 2011. In a bid to support agriculture growth. The minister may allocate Rs 40. The report also said the government may increase spending in agriculture.000 crore. The report also said the government may increase spending in agriculture. "In order to contain fiscal deficit.8 per cent of the GDP in 2009-10 and is pegged quite high at 5. the target was raised to Rs 37. Pranab Mukherjee will stress on revenue generation by expanding the excise tax base by another 2 per cent in sector such as automobile. the report states that the government is likely to fall short of capital proceeds from its disinvestment target of Rs 40.000 crore. it said. it said. power and telecom.. focusing on revenue mobilisation. cement. the pre-Budget analysis said that Mukherjee is likely to cap the combined debt of the Centre and states close to 65 per cent of national GDP.5 per cent for the current fiscal. On disinvestment. it is expected that the government would be able to generate between Rs 35. infrastructure and education. a senior official said on Friday. India's fiscal deficit had ballooned to 6.500 crore. ".000 crore in current fiscal. the finance minister could raise credit target for banks to Rs 450.000 crore to the Mahatma Gandhi NREGA.000 crore through divestment in companies like IOCL." it said. The minister may allocate Rs 40. Marico expects over $32 mn rev in FY12 from Vietnam buy Personal care products maker Marico Ltd said on Friday it expects revenues of over $32 million in FY12 from its Vietnamese buy. .In bad news for exporters.. BHEL and MMTC Ltd. The report says that deregulation in diesel will take place only after inflation cools off to level of 5 to 6 per cent. as a diesel price hike always has major ramifications on the economy. Aggarwal said the minister may widen the service tax basket and include education and healthcare in the Budget. In the last Budget. the finance minister could raise credit target for banks to Rs 450. In the last Budget. FMCG. as the country's exports are likely to cross the $ 200 billion target for the current fiscal In the last Budget. the target was raised to Rs 37. Furthermore.

international business. The company did not disclose the size of the acquisition but said ICP had a turnover of over $25 million in 2010. told Reuters. The steady rise in prices saw an industry growth by 12%. "The acquisition will contribute 15 percent to our international revenues. 2010 Budget FMCG Industry Expectations . Additionally there was a excise reduction as offered by the stimulus package as offered by the previous budget. Expectations of the FMCG industry . chief executive.Earlier in the day.The FMCG sector is one that saw a growth in the year 2009." Vijay Subramaniam. In 2010 the FMCG industry is slated for a growth of 15% compared with that of 2009.The primary expectation of the FMCG industry from the Budget of 2010 -11 is that of tax benefits and better infrastructural benefits . Marico said it has acquired 85 percent stake in Vietnamese company International Consumer Products Corporation (ICP).

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