Gains at Godrej

Dovetailing past and present, the Rs 6,000 crore Godrej Group has leveraged its age-old strengths to foray into sunrise industries and technologies including IT.

Recognized and respected for over a century for the steeliness of its products, the Godrej and Boyce Manufacturing Company Limited took a giant step into missile space with the manufacture of the first airframe section of the state of the art, supersonic BrahMos missile for the Indian armed forces. Jamshyd Godrej, chairman and managing director of Godrej and Boyce, handed over the airframe in Bombay in February to Dr A. Sivathanu Pillai, chief executive officer and managing director of BrahMos Aerospace, which is an Indo-Russian joint venture private limited company (through the ministry of defence, Government of India).

Godrej bagged the order based on their experience in the Launch Vehicle Programs of the Indian Space Research Organization. Elaborating on the selection of Godrej for the outer components of the missile which will carry a conventional warhead, Pillai stated: "They have a very good precision fabrication facility here. The main feature of this missile is its ability to hit the target with precision… only Godrej met that standard.” By manufacturing this critical section of the BrahMos missile, "Godrej has established its ability to develop projects of complex technologies,” writes Change, the Godrej house magazine in its issue of March-April 2006.

Jamshyd Godrej (above) and heavy equipment bound for St Charles Refinery, USA

With Adi Godrej as Group chairman, the conglomerate has annual sales of USD 1.4 billion, and a workforce of approximately 20,000, as per their website www.godrej.com Products range from micro to macro — consumer goods like packaged foods and agricultural products, soaps, detergents, toiletries, household insecticides to locks, safes, home and office furniture, security systems, refrigerators, washing machines, air conditioners, etc which touch practically every aspect of life. The Group is one of the largest in India in the engineering industry, as per their website. Their long list of industrial products/services include electrical and electronic, automated warehousing, material handling, process equipment, tooling, property development and construction, medical diagnostics and IT solutions.

At the beginning of this year the Process Equipment Division of Godrej had shipped out from Bombay three thick-walled reactors and two separators for the St Charles Refinery of the Valero Refining Company in the US, which is the largest refiner in the US. Valued at 15 million US dollars, with a total weight of over 1,500 metric tons and a combined length of over 130 meters, the equipment constituted the largest shipment to be made out of Bombay, notes Change. They were transported on a specially chartered BigLift Shipping vessel, almost two weeks ahead of schedule. Installed at Norco, Louisiana, the reactors would enable the refinery to meet the mid 2006 deadline set by the Environment Protection Agency for the production of diesel with 15 ppm sulphur content.

With exports constituting around 80 percent of sales, the Process Equipment Division also bagged a USD 40 million order for the supply of equipment to Abu Dhabi. The order to be executed by late 2007 involves the manufacture of some of the heaviest walled stainless steel equipment ever manufactured, states Change.

With its security systems’ reputation anchored on trust, the Godrej Security Equipment Division opened new doors with the manufacture of marine hatches and doors for the shipbuilding industry. An order from ABG shipyard in Surat for watertight sliding doors for ships was a first for India, reports Change. Of huge size and custom built, the certified doors can withstand pressure up to 2.5 kg/cm2. Godrej’s blast resistant doors with thickness in excess of 70 mm (MS) and fire resistance of up to two hours is also a breakthrough in business.

(Top, from left): Adi Godrej with director A. Mahendran; Tanya Dubash inaugurates Nature’s Basket outlet. (Alongside)Superbrand Ezee, new age control Evita, partnering rural progress at Aadhaar, ready-to-cook range of chicken snacks,

With terror threats looming large in India, the authorities of the well-known Siddhivinayak Temple at Prabhadevi in Bombay entrusted the complete "premises security solutions” to Godrej. The package included hand-held and metal door frame detectors, Xray baggage scanners, swing gates, fencing, etc. This high profile order executed by the Special Projects and Premises Security (SPPS) team included discussions with senior members of the Maharashtra police, the temple authorities and well-known architects.

In an unusual assignment, the SPPS supplied and installed in Hyderabad a glass stupa for protecting the relics of Lord Buddha which were found at Bavikonda, a Buddhist heritage site about 15 km from Vizagapatnam. "This kind of secure container (extra clear shatter proof glass, imported from Germany) is being made for the first time in India by the SPPS group,” reports Change.

Ion America, a company based in California and headed by Dr K. R. Sridhar, leased space at Pirojshanagar (Godrej’s sprawling and green industrial township at Vikhroli) for their test and characterization center for the development of fuel cell technology, seen as a commercially viable alternate source of energy in a world increasingly beset by a power and fuel crisis, writes H. N. Daruwalla, vice president and business head, Electrical and Electronic Division.

With acquisitions the buzzword in Indian business, Godrej Beverages and Foods Limited created sweetness for itself with the acquisition of Nutrine Confectionery Company Private Limited, the largest player in the Indian confectionery (boiled sugar sweets) market with a turnover of Rs 182 crore. Talking about the sale, Vikram Reddy, whose family established Nutrine 53 years ago, stated: "We are pleased that Nutrine Confectionery… will now be part of the Godrej Group. Godrej’s financial, marketing and management strengths will help the further growth of Nutrine in the years to come.”

Stated Adi Godrej: "The acquisition is a strategic fit in our growing portfolio of the foods businesses… and gives us ready access to the distribution system which Nutrine has built.” Godrej’s acquisition is said to be the largest single brand deal in the FMCG (fast moving consumer goods) industry, as per The Economic Times of June 13, 2006.

Godrej Beverages and Foods Limited was formed in March 2006 when Godrej Industries transferred its foods division to Godrej Tea Limited for a consideration of Rs 70 crore. Godrej Tea was renamed Godrej Beverages and Foods Limited to reflect the combined business. The company’s products span edible oils, fruit drinks (the Jumpin range), fruit juices (Xs), Sofit Soymilk, Sofit ready to eat cereals, tea, tomato puree and bakery fats like Godrej margarine.

With farmer suicides hogging the headlines in Maharashtra and India still to get its agricultural act together, Godrej Agrovet Limited launched Aadhaar, its rural retail centers all over the country to provide farmers agricultural solutions and a range of products and services under one roof. Its tie-up in July with Bajaj Allianz Life Insurance (India’s largest private life insurer, according to company sources) will offer simple and flexible life insurance products to farmers through its Aadhaar centers. A recent agreement with Apollo Hospitals provides shop-in-shop pharmacies at some of its centers, while an agreement with State Bank of India offers banking and financial services.

With a turnover of Rs 900 crore, 1,600 employees and over 40 manufacturing and processing facilities across India, Godrej Agrovet is a market leader in cattle, poultry and aqua feeds, innovative agri products and oil palm development. With 28 Aadhaar centers in West Bengal, Orissa, Punjab, Haryana, Tamil Nadu, Andhra Pradesh, Gujarat and Maharashtra, Godrej Agrovet plans 1,000 Aadhaar outlets in the next five years to partner progress in rural India.

With Godrej Real Good Chicken leading the market in the processed fresh chicken category, the company launched Godrej Yummiez, a range of ready-to-cook chicken snacks. Priced at Rs 35 to Rs 42 for 150 gms, Yummiez will be available in over 350 outlets in Bombay in a variety of forms and flavors – chicken chilly sausages, chicken pepper salami, chicken garlic fingers, chicken spicy cutlets, etc. Speaking at the launch in June, Tanya Dubash, executive director and president-marketing, Godrej Industries Limited said: "Godrej’s Yummiez is a healthy and nutritious high protein option for homemakers as it can be made in minutes and is ideal for snacking between meals. It is 100 percent natural and contains no preservatives. The ready-to-cook segment promises to be a potential growth area as it allows for hassle free cooking, variety of products and more importantly the affordable price point at which it is available.”

Nature’s Basket, the company’s farm-to-store urban outlets, will also expand reach, with Adi Godrej stating that an investment of around Rs 200 crore over the next five years would scale up the number of Nature’s Basket stores to 100 in all the urban centers of the country, as per press reports.

In July, Godrej Consumer Products Limited (GCPL) brought on board its brand wagon the hair color business of Rapidol of South Africa, as well as its subsidiary Rapidol International with a combined turnover last year of Rs 52 million South African rand (approximately Rs 33 crore). Commenting on the acquisition, Adi Godrej who is GCPL’s chairman and managing director said: "This is our second international acquisition in less than a year and reflects our aggressive growth focus. (It) will give us access to the large and growing African market. We also propose to introduce some of our products there, via Rapidol’s established distribution network.”

With the beauty business becoming increasingly important even to older women, GCPL launched in March its Evita age control soap. Stated Hoshedar Press, GCPL’s executive director and president: "There is an increasing demand among Indian women for convenient and inexpensive solutions for skin care and a need to look good naturally. They are looking for an age control solution that is efficient and cost effective. The new Evita is the result of our continuous efforts to offer improved and innovative products to our consumers.” GCPL continues to be the second largest toilet soap manufacturer in India, states its website.

On July 20, GCPL announced that sales in the first quarter of the financial year 2006-07 were up 42 percent, with net profit up by 26 percent, as per its website. "Our profitability continues to be strong despite a significant increase in investments in advertising and promotional activity. I remain confident of GCPL’s ability to maintain its strong growth momentum,” Adi Godrej stated.