MUMBAI: Wipro Consumer Care & Lightning has bought two soap brands – Aramusk and Moloy – from Mumbai based VVF Ltd to strenghten its position in the increasingly competitive soap market in the country.
The deal comes barely a year after VVF acquired these same brands from German consumer products firm Henkel. ET had reported in March that VVF, one of the largest contract manufacturers of bar soaps in the country, planned to sell its personal care brands to focus on manufacturing. Apart from Wipro it had made overtures to Emami and Future Ventures.
While both Wipro Consumer Care and VVF confirmed the deal without disclosing the deal size, experts feel that Wipro could have ponied up about Rs25 crore for the two products. Aramusk is among the oldest male deodorant soaps in the country while Moloy sandalwood soap has reasonable equity in eastern India.
“Both the brands are a strategic fit into our personal care portfolio. Aramusk has a lot of latent equity in the market while Moloy enjoys strong brand recall in the eastern part of India,” said Wipro’s senior vice-president Anil Chugh.
VVF still retains brands such as Doy baby soap and Jo a soap for women in its portfolio. Its branded personal care portfolio including Aramusk and Moloy contributed 15 per cent of its Rs 1500-crore turnover last year.
Wipro has emerged as a player of note in the Rs 6500-crore soap segment; its flagship soap brand Santoor has over 8% market share and is the third largest soap brand after Hindustan Unilever’s Lux and Lifebuoy.
In the last few years, Wipro’s consumer division has growing rapidly courtesy over half a dozen acquisitions in both domestic as well as international markets on which it has spent Rs 1500 crore.
In 2003, Wipro had its first buy with energy drink Glucovita followed by Chandrika soap in 2004 and North-West Switches in 2006. Its first major overseas acquisition was Singapore-based Unza Holdings for over Rs 1000 crore. Two years ago, it acquired Yardley’s franchise in Asia, West Asia and Africa for over Rs200 crore.
In the year ended March 2011, Wipro Consumer business generated revenues of Rs 2800 crore, 242% higher than the Rs 817.7 crore it generated in 2006-07. It now contributes over 9% to the IT giant’s total sales.
Analysts say that this latest acquisition from VVF will not make a significant impact immediately to Wipro’s personal care business given the brands’ small size and limited presence. ‘They are too small to contribute in either turnover or bottom-line of Wipro,” said Anand Mour, vice-president at Indiabulls Securities.