chairman. A quick read of this reveals:
- Strategic business planning:
[Provide] visionary and strategic
inputs to the top team for the
process of creation of business
strategy; critique of the business
strategy created by the business,
focus on new category entry, new
brands and extensions, etc. - Leadership development:
Mentor the MD and CEO. - Acquisitions and divestments:
Review and guide initiatives. - Strengthen Marico’s board:
Creation of a board agenda
and anchoring the business
strategy, risk reviews and
internal governance. - Crisis management: Resolve
critical issues during a crisis.
Explains Gupta: “The process of
transition probably started in 2012-13.
We had a comfort level. I was at that
time in my ninth year at Marico and
came up with our ‘roles’ paper. This
ensured that there were no grey areas.
The journey has been evolutionary
rather than revolutionary.”
The growth of Marico to an
FMCG giant from a business
dependent on commodity prices in
the form of copra (for Parachute
coconut oil) and safflower seeds
(for Saffola oil) between 1990 and
2000 has also been evolutionary.
In the course of its journey,
Marico has picked up brands (it
bought the Paras personal care
brands Set Wet, Livon and Zatak
from Reckitt Benckiser in 2016 and
also the Nihar hair care brands from
HUL in 2006) and also recently
acquired companies in the male
grooming space (Zed Lifestyle and
Isoplus) where—despite the presence
of international brands—market
penetration is still in single digits.
Marico has also expanded its
presence to international markets,
including the Middle East, Vietnam,
Malaysia and Bangladesh. Mariwala
explains some of the learnings while
expanding overseas. “It is difficult;
normally there is the temptation to
hand over operations to an Indian
distributor but you need to have
a separate dedicated resource to
evaluate consumer behaviour and
trends—each territory has a different
culture.” There are also learnings in
terms of product portfolio in each
territory. When Marico expanded
operations to Egypt—a market with a
strong focus on costs—it applied some
of the cost focus to Indian operations.
And large shareholders are happy
with how Marico has matured.
Rahul Bhasin, founder and managing
director of Baring Private Equity
Partners India, has been a Marico
investor in his personal capacity since
a little after the company’s IPO in- (
100 invested at the time of the IPO was worth14,150 on March 31,
2017, implying a CAGR of 27 percent.)
Bhasin recounts his first meeting
with Mariwala, when the IPO was
set to be launched. “I met him at a
time when there was a lot of negative
publicity around the company [there
was apprehension as the company’s
key brands Parachute and Saffola
were owned by Bombay Oil Industries
at the time].” But Bhasin was so
impressed by his value systems that
he bought into Mariwala’s verbal
assurance that he would “get it
done”. Bhasin bought a block of
Marico shares for himself and family
which he has never divested. True to
Mariwala’s word, Marico acquired
the Parachute and Saffola brands
from Bombay Oil Industries in 1999.
“I found an inquisitive
entrepreneur with an open mind. He
has been among the most outstanding
entrepreneurs I have seen over the
past 20 years with the ability to
translate innovation into relentless
excellence in execution,” says Bhasin.
Bhasin candidly admits that
Mariwala’s decision to step back in
2014 did get him a bit worried, “but
he plays a very active and effective
role as chairman”. “The company
has a very explicit and strong value
system. Harsh has had this hunger
to keep getting better; every time
I chat with him, he is reflecting
on a new idea,” says Bhasin.
Marico continues to follow some of
the mantras that Mariwala had spelt
out earlier—choose categories where
the company believes it has a ‘right
to win’ (where it has already won
market leadership and is expanding),
do not enter segments which are
highly penetrated (such as soaps) and
rebrand or carry out brand extensions
where possible (Saffola oats, Saffola
multigrain flakes) in the form of in-
between meals and breakfast foods.
CEO Gupta is confident that there
is room for growth even with already
well-established brands: For instance,
the company hopes to expand
Parachute in rural India, from where
comes 42 percent of the brand’s sales
with the balance in urban India.
Marico, which this year made two
acquisitions in the male grooming
space—a 45 percent stake in Beardo’s
parent firm Zed Lifestyle and hair
styling brand Isoplus—is confident
that this segment will witness strong
growth in the coming years.M
arico’s business and its
CSR activity take up over
a quarter of Mariwala’s
time, he says. He also devotes equal
time to the skin care business Kaya.
Over 15 years after opening the first
Kaya Skin Care clinic in Mumbai
and listing it as a separate company,
the business reveals loose ends
which have yet to be dealt with.
In 2014, Kaya Ltd merged“I believed the organisation’s
interests came before the
individual, so I was ready to go.”
DECEMBER 29, 2017 FORBES INDIA | 65