Dabur, a leading manufacturer of FMCG (Fast Moving Consumer Goods) and ayurvedic products, is set to inaugurate a fresh manufacturing plant in South India within the next year. This strategic decision follows a noteworthy surge in the company’s business operations throughout the region, as disclosed by Dabur India’s CEO, Mohit Malhotra, in an exclusive interview with PTI.
In the past half-decade, Dabur has experienced a notable upsurge in its domestic sales originating from South India, currently accounting for 20% of its overall sales. Recognizing this considerable growth, the company is proactively formulating strategies to address market-specific disparities by launching tailor-made products that resonate with the preferences prevalent in these regional markets. Dabur, equipped with 13 manufacturing facilities scattered throughout the nation, is focused on expanding its production capabilities to align with the escalating demand. Mohit Malhotra stressed Dabur’s dedication to broadening its manufacturing endeavours by incorporating fresh production lines, strategically addressing the dynamic requirements of the evolving market landscape.
Dabur plans to allocate an annual capital expenditure ranging between ₹350 crore to ₹450 crore for the expansion of its manufacturing capabilities. The company aims to extend its production reach into international markets, with a particular focus on regions like the Middle East and Europe. Alongside this global expansion strategy, Dabur is streamlining its manufacturing operations. This involves the gradual phasing out of units where tax benefits are approaching expiration. Simultaneously, the company is strategically establishing new facilities in areas that are transitioning to the GST (Goods and Services Tax) regime to optimise operational efficiency.
According to Malhotra, Dabur has witnessed substantial growth in South India, emphasising that it presently accounts for 19 to 20 percent of Dabur’s domestic business. He noted that this figure was less than 10 percent nearly seven to eight years ago, indicating a doubling in contribution from the Southern region.
In reference to the timeframe for the new plant in South India, Malhotra suggested that it might not be several years away but potentially within a year. He expressed the possibility of planning something for South India within that timeframe as the business continues to expand. Notably, Dabur had recently invested around ₹350 crore to establish a new unit in Indore. Malhotra stressed the importance of creating a specialised product framework named RISE (Regional Insights, Speed, and Execution) designed explicitly for the unique consumer preferences and demands prevalent in South India. This strategic move by Dabur is aimed at leveraging the distinct characteristics of the region’s market. It aligns with the company’s goal to fortify its position in South India, narrowing the gap between its current market presence of 20% and the industry standard of 30% established by other FMCG competitors operating in the region.
The CEO emphasised Dabur’s strong global footprint, notably in the MENA (Middle East & North Africa) region. The company runs a manufacturing unit in the UAE and leverages trade agreements to cater to markets such as Saudi Arabia. However, despite the company’s promising growth trajectory following the COVID-19 pandemic, Malhotra recognized that geopolitical tensions, especially in the Middle East and the ongoing Russia-Ukraine conflict, have affected specific international markets.
Dabur’s forward-thinking strategy to expand its manufacturing capacity demonstrates its dedication to adapting to changing market needs and solidifying its role as a leading entity in the FMCG and ayurvedic products domain.
