>GILLETTE INDIA LIMITED (HDFC SECURITIES)

Company Background & Business Profile

Gillette India Ltd (GIL) was incorporated in 1984. The company divested its Geep battery business in 2003. In 2005, P&G acquired Gillette globally; subsequently making GIL a part of P&G. GIL’s areas of operations on a broader level include personal care, health care and consumer products.

GIL operates in three business segments viz; personal grooming, portable power and oral care. In the personal grooming segment, the company offers razors, blades, shaving brushes, shaving gel & after-shave gel. Some of its major brands include Mach3 Turbo (triple blade shaving system), Vector Plus, Sensor Excel, 7 o’clock, Presto & Wilkinson. GIL also has a small presence into ladies personal care segment (Gillette Sensor Excel for women). In the oral care segment, the company provides toothbrushes under the brand Oral-B. Oral-B Vision and Oral-B Shiny Clean are among some of the prominent toothbrush brands offered by the company. GIL provides alkaline batteries in the portable power segment under the brand Duracell. GIL has a manufacturing facility located at Bhiwadi in Rajasthan and has two packing units in Rishikesh (Uttaranchal) & Baddi (Himachal Pradesh). As of June 30, 2008 the plant had an installed capacity to manufacture 234 mn razors and cartridges (capacity utilisation was 85.9% in FY June 08) and 886 mn safety razor blades (capacity utilisation was 88.5% in FY June 08). The production of shaving brushes, toiletries, toothbrushes & batteries is either through job work or is outsourced.

Personal grooming segment accounts for 73.7% (in FY June 09) to the total revenues, while portable power & oral care segment contribute 5.4% & 20.9% respectively. GIL imports around 76% of its total raw material requirements, while its exports account for 2-3% of the total turnover.

Presence of Gillette worldwide:
Founded in 1901, Gillette Company, US (which was acquired by P&G, US) is the global market leader of shaving products, including blades and razors having presence across many countries. Its portfolio includes grooming products, alkaline batteries, oral care products and personal care products. The global company, unlike its Indian arm GIL, has presence also in hair care & body wash. Also, besides Mach 3, it has brands like five-blade Fusion line (launched in 2006), which is at 30% price premium over Mach 3.

Increasing presence in India
Gillette is tapping the large Indian consumer base to establish a strong presence in the country. The market for shaving blades in India is the largest in the world. The market for oral care (toothbrushes) is the second largest in the world, while that of batteries is the third largest in the world (all in volume terms). Apart from this, the increasing consumer-spending capacity and
the increase in retail activity are also some factors, which attract Gillette to expand its business in India. Going forward, Gillette’s products like hair care & body wash along with new generation five-blade shaving system (premium product sold under brand name Fusion), which at present do not form part of GIL’s portfolio, can also be brought to India.

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