Emami Group has enlisted the services of McKinsey & Co to pinpoint 2-3 promising sectors for potential entry, such as packaged essentials like flour, rice, sugar, and salt, as well as ready-to-eat meals, ready-to-cook options, gourmet packaged foods, and kitchen appliances. Additionally, the group expresses interest in divesting the Frank Ross pharmacy chain, contingent on receiving a favorable valuation. This strategic move aims to sharpen the focus on higher-margin ventures and to explore acquisition prospects within the paper business, as highlighted by Aditya V Agarwal, the group’s promoter director.
Agarwal mentioned that there are intentions to initiate an initial public offering (IPO) for Emami Agrotech, the group’s edible oil and packaged food business. This plan is contingent on the business achieving sustained profitability, although its performance was affected in the last fiscal year and the current year due to the global volatility in edible oil prices.
As the group reaches its 50th anniversary, there is a strategic shift towards prioritizing consumer-facing ventures. The emphasis will be on fast-moving consumer goods (FMCG), edible oil, healthcare products, and packaged food, leveraging the group’s established expertise in these domains. The majority of future capital allocation will be directed towards these areas.
“Once McKinsey & Co identifies the opportunities, the group will foray into those since we need new growth vectors and also provide opportunities for the third generation of the family members to build businesses,” said Agarwal. Six third generation members, who are in their 20s, have already entered the business as trainees.
The Emami Group has evolved into a conglomerate with a valuation of INR 30,000 crore. The flagship FMCG business, managed by Emami Ltd, accounts for INR 4,000 crore, while Emami Agrotech contributes INR 18,000 crore. Notably, 60% of Emami Agrotech’s revenue is derived from the packaged oil and food sector, with the remaining portion attributed to institutional sales of edible oil to other FMCG companies.
At present, the group operates a Frank Ross pharmacy chain comprising more than 250 stores, generating a turnover of INR 500 crore and yielding a profit of approximately INR 15-20 crore.
“The online pharmacy firms want a hybrid model and we would be open to sell the business if somebody gives a good value,” said Agarwal.
In commemoration of its 50th-year milestone next year, the group is establishing an experience center, crafted by the specialty firm Eka Resources, and introducing a fresh logo, skillfully designed by the London-based agency Evolve.
Founded in 1974 by RS Agarwal and RS Goenka, the business started with the brand Moon Wind. Later in the same year, it expanded its product line under the Emami brand, venturing into categories such as talcum powder, vanishing cream, and cold cream.
Over time, the company has acquired several firms and brands, including Himani, Zandu, Kesh King, Crème 21, Dermicool. Additionally, it has strategically invested in start-ups such as The Man Company, TruNativ, FurBall Story, and Alofrut.