Leveraging India InternationallyMarico Experience

FMCG Company formed in 1990 :

- With 2 Brands : Saffola & Parachute- In 15 years : INR 100cr to 1150cr- All sales through branded products and servicesIntroduction

Downstream Value Addition :Consumer End - Branding, Product, PackagingV/S

Upstream Value Addition :Lower Costs IT & BPOMarico Builds Brands ...

The Business

Hair Care Pre & Post Wash(In India and Abroad)

Skin Care Customised Solutions :Through KAYA Skin Clinics

The Business.Sundari Global Ayurvedics : Business acquired in US in 2003

The Business.Wellness Healthy Cooking Oil, Blends, Salt, Functional Foods

Low Capital NeedsHigh Branding CostsDistribution : critical to successNew Products : Failures 8 out of 10 Launches3 to 5 years to break-even, if successfulGlobal Brands & MNCs in large segmentsBe Distinctive & Unique to succeedCharacteristics of FMCG Business

How Did It AllSTART ?Maricos International Journey.

It all started with smuggling

Maricos International Journey.

Export of Coconut Oil was prohibited.

Marico had then lobbied to get export allowed.

Thus started a new business in the early 90s.Maricos International Journey.

Indian- Centric- driven by :

Access to Clusters of Indian expats- Gulf, US, Canada, Singapore & MalaysiaCommon Media Footprint - Gulf, other SAARC Countries Common Ethnicity/ Hair Oiling habits - Bangladesh, Nepal, Pakistan, BhutanJourney driven by....

Used Distributor Model to enter countries

Appointed Distributors in Gulf, SAARC countries, US, Singapore / Malaysia etc

And then onto . Brand Building in the markets abroad

Spread the Brand : PARACHUTE The Mechanics....

DirectBangladesh UAE, Saudi, Oman, Qatar, Bahrain, Kuwait, Yemen, Lebanon, Sudan,Syria, JordanPakistan, Nepal, BhutanUS, Canada, AustraliaSingapore, Malaysia, Indonesia, MyanmarKenyaPlanned : African countriesIndirectSeveral where ...Parachute is available through wholesale trade channelsWhere we have reached.

How it has progressed....International turnover in INR cr FY07 figs Plans

Chart1

5

8

12

16

21

35

46

63

80

96

116

161

IBG sales

Sheet1

FY965

FY978

FY9812

FY9916

FY0021

FY0135

FY0246

FY0363

FY0480

FY0596

FY06116

FY07161

Sheet1

IBG sales

Sheet2

Sheet3

Marico in the Middle East

Parachute Gold - unique positioning.

Parachute Lite for easy grooming & UV protection.

Parachute Jasmine : perfumed coconut nourishment with conditioning.

Parachute Sampoorna : value added CNO with hibiscus, almond etc for complete nourishment

Started with Oils Indians in Gulf...

In Modern FormatsCustomised to suit Locals...

Parachute CREAMSParachute HAMAM ZAITTo Value Added Hair Care

Local Events

DisplaysUsing local ads local celebrity

The Result : Middle East Sales in INR crParachute Creams are the largest selling within the basket ...

Chart1

14

17

24

34

43

60

SALES

CONS

2001-022002-032003-042004-052005-062006-07

Rs. LacsRs. LacsRs. LacsRs. LacsRs. LacsRs. Lacs

SALES1,389.571,747.412,422.163,430.714,303.18597919,272.03

GC539.21582.071,244.121,644.451,997.46

ASP431.32517.61518.25752.711,804.0021006,123.89

NC107.8964.46725.87891.74193.46

FY02FY03FY04FY05FY06FY07(E)

SALES141724344360

CONS

SALES

01-02

SALESGCASPNC

2001

SAP2544.75763.04431.32331.72

N&B456.72172.12172.12

OTHERS160.8841.71041.71

Bulk537.581010

GULF1389.57539.21431.32107.89

107.89

2002

SAP3209.55704.15517.61186.54

N&B503143.08143.08

OTHERS156.2638.7138.71

Bulk802.88-59.71-59.71

GULF1747.41582.07517.6164.46

64.46

Sheet3

No Escape Buttons Separate StructureNon-Core business for MNCs, Grab Market ShareLocal Insights Product DevelopmentLocally developed Advertisements and MarketingExperience Dealing Modern TradeFor people : Opportunity Posting Outside India/ TravelThe Learnings...

Marico in Bangladesh

15 years behind IndiaStarted Market Expansion in 1995Large Coconut Oil MarketDominated by Local Brands

Bangladesh

Leveraged :Plastic Packaging with flip top capsattractive, convenient, economicalWide Mouth Jars All weather packMini Bottles

Distribution using InformationTechnology

Superior Localised Advertising

Superior Sales PromotionsThe Parachute Journey....

Started with very low margins

On gaining critical mass :-Set up Subsidiary & Backroom OperationsSet up our own factory

Today .. The largest Indian Company in BangladeshThe Parachute Journey....

Going Beyond Oils Acquired Two Soap Brands 2005

The Results : Last 5 years(fig in Tk Crores)

Chart2

34

46

58

73

99

156

SALES

CONS

2001-022002-032003-042004-052005-062006-07

Rs. LacsRs. LacsRs. LacsRs. LacsRs. LacsRs. Lacs

SALES1,389.571,747.412,422.163,430.714,303.18597919,272.03

GC539.21582.071,244.121,644.451,997.46

ASP431.32517.61518.25752.711,804.0021006,123.89

NC107.8964.46725.87891.74193.46

FY02FY03FY04FY05FY06FY07(E)

SALES3446587399156

CONS

SALES

01-02

SALESGCASPNC

2001

SAP2544.75763.04431.32331.72

N&B456.72172.12172.12

OTHERS160.8841.71041.71

Bulk537.581010

GULF1389.57539.21431.32107.89

107.89

2002

SAP3209.55704.15517.61186.54

N&B503143.08143.08

OTHERS156.2638.7138.71

Bulk802.88-59.71-59.71

GULF1747.41582.07517.6164.46

64.46

Sheet3

Parachute in Bangladesh: MS %MARKET SHARE > 55%Awareness89% Total awareness level- 95% in urban vs. 79% in rural42% TOM awareness across Bangladesh

Chart1

5644

5941

6436

Platics

Tins

Sheet1

PlaticsTins

2003-045644

2004-055941

2005-066436

Sheet2

Growth03-0404-0505-06

Parachute34%25%21%

LP24%19%10%

SP60%38%41%

Chart2

0.15

0.24

0.33

0.42

0.47

0.55

PCNO MS

Sheet3

00-0101-0202-0303-0404-0505-06

PCNO MS15%24%33%42%47%55%

Sheet4

Sheet5

Limited by hair oiling habitTo leverage- Indian Habit- Food- Raw Materials like spices, Indian coconuts- Science Ayurveda- Any other source of competitive advantage

Further Geographical Expansion

- Highly cluttered SaturatedDifferent DistributionHigh Cost EntryDominated by MNCs

Decided to create brand through an experience routeDeveloped Countries

Acquired BrandBuilt on Principals of AyurvedaChanged FocusStore to Spa BrandCatering to ResortsDestination SpasDeveloped Protocols & TrainingShiro Dhara, Marma PointsAppointed Distributors in Asia PacificSundari

Four SeasonsMariott, Canyon Ranch, Oberoi, WestinHuge Learning CurveB to B MarketingLong Lead Times to get entryNiche BrandSundari (Contd)

- Customised Solutions for SkinProblem Normal and Anti-Aging SkinDermatologists Key DifferentiatorMedi-Spa-Zen like AmbienceLaunched Hair ServicesKaya 2003

Unique Business ModelNo-Chain Internationally Leveraged doctors / skin practitioners 2 in Dubai1 in Abu-DhabiUn Clear RegulationsPlan expansion other GCC Countries

Kaya ME

1. Expand GCC & Bangladesh Wider Product Basket2. New CountriesLeverage Hair Care Products3. Expand KayaGCC Countries and Beyond4. Sundari EuropeIncreasing Scale5. Growth through Organic / Acquisitions Route

Going Forward - Next 3 Years

1.Career Paths in Different Business Outside IndiaLeveraging Technology AcrossLearning Marketing and DistributionNew Ideas Domestic BusinessCommon Advertisement mediums e.g. Kerala / GulfBenefits Beyond Top/ Bottom Line

We are passionate about

India Advantage

&

Uncommon Sense

Global Players in healthy living through distinctive solutions, largely leveraging India advantage.

Thank You