GCPL acquires FMCG company in United Kingdom

Company Release, November 3

New Delhi

The Board of Directors of Godrej Consumer Products Ltd, one of India’s fastest growing Fast Moving Consumer Goods (FMCG) companies today announced the acquisition of 100% ownership interest in Keyline Brands Limited, U.K. (Keyline).

Keyline is one of U.K.’s admired FMCG companies engaged in the manufacture, marketing, sales and distribution of cosmetics and toiletries with a strong portfolio of brands and a well developed customer base in numerous supermarket chains and discount stores.

Commenting on the acquisition, Mr. Adi Godrej, Chairman and Managing Director, GCPL, said, “This acquisition represents the commencement of our building a global presence in the international FMCG market. Keyline Brands is a consistent profit making Company with a portfolio of many great brands that have tremendous potential to grow in Europe, West Asia and the Asian region. The acquisition will add strongly to GCPL’s consolidated topline as well as bottomline. It will enable GCPL to enhance its various skills in marketing and management of modern trade channels that will be extremely relevant in a rapidly changing Indian retail environment. Acquisitions, both in India and overseas, of profitable businesses and strong brands that have a synergy with our core competencies will continue to be one of our key strategies in strengthening our competitive position, driving profitability and enhancing stakeholder value”

Mr Brian Boyce, Chairman of Keyline said “I am delighted we have found a partner for the business that will take it forward with a new vigor. Godrej is a highly respected and very professionally run company that will ensure Keyline Brands develops strongly”.

Details of transaction

Keyline Brands Limited is a profit making entity whose sales revenues, including that of its 100% subsidiary Inecto Manufacturing Limited, UK; in CY 2004 were GBP 16.7 million (around Rs 132 crore) and a Profit Before Tax (PBT) of GBP 2.2 million (around Rs 16 crore).

The present management team along with the 45 employees of Keyline will continue to be part of the combined entity.

KPMG were the advisors on the transaction.

Perspective of Keyline Brands Limited

Keyline possesses its own integrated functions including sales, marketing, finance, IT, warehousing, logistics services besides an efficient customer service department. It also has a manufacturing unit, Inecto Manufacturing Ltd., which is an efficient producer of a large cross section of liquid, lotion and cream products in bottles, tubes and sachets.

Some lines including aerosols, soaps and talcum powders are sourced from specialist UK contract manufacturers while some other products are imported from overseas principals and handled on a distributorship basis.

Acquisition in line with GCPL’s objectives

The acquisition is in line with GCPL’s thrust on continuously enhancing value for all its stakeholders by identifying acquisition opportunities that deliver Economic Value Addition in the medium term thereby growing business profile and profitability. It provides a compelling case wherein KBL’s businesses possess natural operating synergies with those of GCPL’s and the combined entity will be in a position to create value at a faster pace.

Ownership of several key brands

Keyline owns many brands that straddle across the Toiletries, Cosmetics and Men’s grooming categories. The acquisition gives GCPL trademark ownership in several geographies

Opportunity to enter new markets

Besides the United Kingdom, Keyline’s brands are present in the Gulf Cooperation Council Countries that include Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates, and the Sultanate of Oman besides Jordan, Australia, Canada and parts of Europe. The Company also has a very strong customer base in Boots, Asda, Sainsbury, Tesco, Superdrug, Savers and other such super market, pharmacies and discount chain stores.

Additionally, the large diaspora of consumers of Indian, Afro Caribbean and other Asian origin are a highly potential target audience for GCPL’s range of hair colours and personal products

Knowledge and skills sharing

The transaction offers GCPL the opportunity to adopt various practices in marketing and trade channel management which will be beneficial in a changing domestic retail environment.

Going forward, GCPL proposes to derive further value from the transaction by leveraging its high quality yet low cost manufacturing skills and producing some of Keyline’s products in India

About Godrej Consumer Products Limited

Godrej Consumer Products Ltd. (GCPL) is a major player in the Indian FMCG market with leadership in the personal care, hair care, and the fabric care categories. It is also one of the largest marketers of toilet soaps in the country with leading brands such as Cinthol, Godrej Fairglow and Godrej No.1. The Company has state-of-the-art manufacturing facilities at Malanpur (M.P.) Baddi (Himachal Pradesh) Guwahati (Assam) and Silvassa.

For further information contact:

Anuradha Roy Chowdhur

Godrej Consumer Products Ltd

Tel.: +91 22 2519 4873

Fax: +91 22 2518 8040

e-mail: an.roychowdhury@godrejinds.com