Godrej Consumer Products Ltd (GCPL) on Tuesday entered into an agreement to acquire the PT Megasari Makmur Group and its distribution company in Indonesia for an undisclosed amount.
The Megasari Group manufactures and distributes a wide range of household products including household insecticides, wet tissues and air fresheners. Its products are category leaders in the Indonesian market.
GCPL Chairman Adi Godrej told The Hindu that in sales terms, the Megasari Group had a turnover of Rs.550 crore last year and that the acquisition would be completed in 4-6 weeks.
In a statement, Mr. Godrej said, “the Megasari Group provides us a strong platform to establish a significant foothold in Indonesia, which is among the largest consumer markets in Asia. Given Megasari Group's leading position in household product categories in Indonesia and the Godrej Group's strong presence in this category in India, we believe this acquisition will provide significant synergies and create value for shareholders.'' The investment provides GCPL a foothold in the third largest consumer market in Asia (after China and India) and Indonesia shares a similar demographic and economic profile as India. With a market size of around $345 million, it is the fourth largest household insecticides among the emerging markets, after China, India and Brazil with a per capita spend on household insecticides almost thrice that of India. The business provides a platform for launching other Godrej home care and personal care products in Indonesia.
As part of the integration plan, GCPL said, the Megasari Group's current management team will continue to be involved with the companies.
The Godrej Group will put in place a cross functional team consisting of current Megasari employees and Godrej's team from India. The cross-functional team will be led by Naveen Gupta who has spent eight years in Godrej Sara Lee's International Operations. Megasari Group was established in 1996 and has factories West Java, Indonesia.
