Dabur, an FMCG and ayurvedic products maker is planning to set up a new factory in South India in less than a year’s time, as its business scales in the region, according to the news agency PTI.
Dabur, having reported a significant increase in its domestic sales from South India contributing 20 per cent of its total sales, has witnessed a folds surge in this region’s business over the past 5-6 years.
According to the report, the company expressed its commitment to identifying market gaps and specific usage patterns to introduce tailor-made products for these markets.
The company currently has 13 manufacturing units across the nation, is planning to expand its capacity to fulfill the demand and is diversifying its production activities by incorporating new lines, Mohit Malhotra, CEO, of Dabur India told PTI.
The company is also planning to expand its production activities in international markets such as the Middle East and Europe. It already has a second unit in Egypt, the second-largest market after Saudi Arabia.
Furthermore, the company is streamlining its manufacturing operations by closing down units where tax sunsets are imminent, while simultaneously establishing new units in regions transitioning to the GST regime, as stated by Malhotra.
Dabur recently invested in opening a new unit in Indore, where it had invested around Rs 350 crore.
Certain brands, such as Dabur Red, significantly contribute to 40 per cent of the company’s business in South India, with Dabur Honey and Odonil also holding prominence in the region, according to Malhotra.
However, he noted that Dabur’s market salience, at around 20 per cent, falls short in comparison to other FMCG makers with a saliency of 30 per cent. Addressing this, Malhotra emphasized the company’s focus on closing this gap of 10 to 15 per cent in the South as a key area for geographical growth.
Dabur utilises the Common Market for Eastern and Southern Africa (COMESA) while manufacturing in Egypt to supply products to East Africa.
Additionally, the company has a factory in Turkey that ships to European markets, one in South Africa catering to the Southern African Development Community (SADC) markets, and a contract manufacturer in the United States serving the Canadian market.
While international business is performing well, Malhotra acknowledged the ongoing recovery post-Covid, while also highlighting the persistent challenges posed by geopolitical issues, such as tensions in the Middle East and the Russia-Ukraine War.