Pidilite shifts focus

Pidilite Industries is considering spinning off its manufacturing facilities to a new company with a joint venture partner. And it will will rely more on outsourcing the manufacture of its products and selling them through its 3 lakh strong dealer network spanning more than 3,000 towns.

Pidilite will also sell off its synthetic resin and pigment business, for which it has appointed DSP Merill Lynch as advisor.

B K Parekh, chairman, Pidilite Industries, has said that Pidilite will become a consumer products company, and expand through the acquisition of brands. It has already started the process by buying the ''Ranipal'' brand from Indian Dyestuff Industries for about Rs.4 crore.

Currently, Pidilite has about 40 brands covering 400 industrial and consumer products in its portfolio. The flagship brand is Fevicol. Some of its other brands are Fevikwik, Fevistik, Acron, Wudfin, Fevibonds and so on.

The company claims that the ''Fevicol'' brand has a market share of 65 per cent in the consumer adhesives market. It has been in existence since 1959 and carries a strong brand equity.

The company''s exports have grown from Rs.11.3 crore in the financial year 1994-95 to Rs.30.82 crore in 1998-99, which is 9.3 per cent of the company''s net sales. Pidilite exports to Sri Lanka, Australia, the Middle East and Europe.

Pidilite is one of the Indian companies that has furnished the economic value added data in its balance sheets. Its EVA has risen to Rs.12.74 crore in 1998-99 from Rs.59 lakh in 1996-97.  The company''s net worth has grown from Rs.60.7 crore in 1994-95 to Rs.134.87 crore in 1998-99. The promoters'' holding in the company is about 72 per cent.