Henkel bullish on India, to enter retail haircare  ( December '3,2003, ET)

Henkel Spic India is bullish on closing 2003 with a turnover of Rs 360 crore-Rs 370 crore, up from Rs 345 crore last year. The Indian subsidiary of the German major, Henkel Group, is targeting a Rs 500-crore turnover by 2005.

For the three quarters ended September 2003, the turnover stands at Rs 260 crore. Henkel Spic Managing Director A Satishkumar said on Tuesday that the company would soon enter the retail haircare market. At present, the company’s high-end brand, Schwarzkopf Professionals, is available through the beauty salon network.

Head of corporate communications of Henkel, Germany, Ernst Primosch said, “We are making good progress in India. As per a brand awareness study, 27% of Indians can connect with Henkel brand and product categories.” Globally, Henkel has created a new corporate identity to cover all its 750 brands. The objective is to stem the dilution of the corporate brand as a result of too many identities, Mr Primosch said. Essentially, all the products will come under the umbrella of a corporate brand, Henkel. Globally, Henkel has very strong product brands like Fa, Henko, Mr White and Pril. The enormous number of brands under the Henkel stable is essentially on account of a global presence and creation of various identities to suit regional markets. The attempt to unify it was kicked off a year back. Studies reveal that products with both corporate and brand identities show a better share price performance, he added.

Henkel Spic India was promoted by Henkel and Tamil Nadu Petroproducts, part of Spic. With a recovery in the economy and upsurge in demand for goods and services, Mr Satishkumar indicated a step-up in advertising expenditure next year.

Henkel Spic India is now turning to its German parent company for all its working capital and capital expenditure requirements. “Instead of borrowing at high interest rates from banks, we are borrowing from our parent and reducing the interest burden,” he said. The average rate of interest on borrowings from Henkel amounts to 5%. Besides, globally, Henkel has set aside proceeds from its E7 billion issue for expenditure by its subsidiaries in regional markets.