Creador buys Godrej’s non-core food business in Indonesia

25.01.13 / Author:

Mumbai, January 25, 2013: Godrej Consumer Products Ltd (GCPL) announced today that it has entered into an agreement to divest its non-core Foods business to Creador, with the transaction expected to close in about two months. Since the acquisition of this business in 2010, Godrej has been able to enhance the business value significantly. In 2012, this business generated Net Sales of about US$ 22 million.

The foods business in Indonesia includes cereals, snacks and instant food products under largely the brands Simba and Turbo. Under this agreement, Godrej’s Indonesian subsidiary will continue to distribute these brands for a 2 (Two) year period. HSBC acted as an exclusive advisor to Godrej.

Commenting on the divestment, Mr. Adi Godrej, Chairman, GCPL said:

“Our decision to divest the foods business is very much in line with our strategic intent to focus on home and personal care. The divestiture of this business will improve the margin profile of our Indonesian business and help the team to take the household and personal care platforms to their full potential. Over the last few years, Naveen and his great team have delivered excellent performance and we remain very optimistic of the future growth prospects in Indonesia. The consideration from this divestiture will further strengthen our balance sheet.”

Vivek Gambhir, Chief Strategy Officer, Godrej Industries, said:

“Our primary thrust in GCPL continues on executing our 3 by 3 strategy – focusing on 3 categories – home care, hair care and skin cleansing in emerging markets in Asia, Latin America and Africa. For our Indonesian business, along with continued strong organic growth, we will continue to look to selectively bolt on brands that are strategic, financially accretive and provide significant synergies. We also look forward to strengthening our personal care presence in the country.

Over the last few years, we have clearly demonstrated the results from our focused 3 x 3 approach and are confident that we will be able to further accelerate our performance trajectory in the future.”

Naveen Gupta, COO of the Godrej Indonesian Business, added:

“We remained inspired by our vision to make Megasari a leading home and personal care company in Indonesia. Under GCPL, our foods business did not have the benefit of a global innovation platform like we have in our other categories of household insecticides and air care. This divestment will now enable us to focus on our key brands – Hit, Stella and Mitu and further accelerate their growth trajectory.

Simba and Turbo have very strong equity with Indonesian consumers. We are confident that with the right attention & innovation, Creador team will create significant value with this portfolio.”

Brahmal Vasudevan, Founder and CEO, Creador, said:

“We are delighted to be acquiring Godrej’s Indonesian food business. This acquisition demonstrates our commitment to making growth investments in Indonesia, and reflects our strong capabilities in both Indonesia and India. PT Simba has a number of leading Indonesian brands in the cereals and snacks business with excellent growth prospects.”

Cyril Noerhadi, President Director of PT Creador added:

“PT Simba is our second investment in Indonesia after MNC Skyvision in 2012. We believe, with strategic focus there are significant opportunities to accelerate the growth of the Simba and Turbo brands. Creador is committed to making substantial new investments in manufacturing, new product development as well as sales and marketing activities to grow PT Simba over the medium to long term.”

About GCPL:

Godrej Consumer Products Ltd (GCPL) is a major player in the Indian FMCG market, with leading Household and Personal Care Products. Our brands, which include GoodKnight, Cinthol, Godrej No. 1, Expert, Nupur, aer, Hit, Fairglow, Ezee and Protekt are household names across the country. We are one of the largest marketers of toilet soaps in the country and are also leaders in hair colours and household insecticides. Four of our brands (GoodKnight, Cinthol, Godrej No.1 and Godrej Expert Hair Colour) are ranked among the ‘100 Most Trusted Brands’ in the country by Economic Times – Brand Equity 2012.

We are driven by our mission to continuously enhance the quality of life of consumers in high-growth markets with superior-quality and affordable home care, personal care and hygiene products. We also have a strong emerging presence in markets outside India. As part of increasing our global footprint, we recently acquired 60% rights in Cosmetica Nacional, a Chilean hair colour company. The acquisition of the pan-African Darling Group, and Rapidol and Kinky in South Africa have given GCPL leading positions in the fast growing African ethnic hair care market. With acquisitions in West Africa, the Megasari Group, a leading household care company in Indonesia and Issue Group and Argencos, two leading hair colorant companies in Argentina, Keyline Brands in the United Kingdom, and Godrej Global Mideast FZE, we own international brands and trademarks in Asia (ex. India), Latam, Africa, Europe, Australia, Canada and the Middle East.

About Creador:

Creador is a private equity firm focused on long-term investments in growth- oriented businesses in Indonesia, India and Malaysia. Creador is committed to making investments especially in consumer orientated businesses. Some of Creador’s recent investments include Cholamandalam, a leading vehicle financing business in India, OldTown White Coffee – a regional chain of Asia restaurants and a leading 3 in 1 white coffee brand and MNC Skyvision – Indonesia’s leading DTH operator.

PT Simba is Creador’s second investment in Indonesia. We expect to expand our portfolio of investments in Indonesia during the course of 2013 and 2014 across a range of sectors.