New Delhi : India was the flavour of the year, at least in the FMCG sector, as multinationals hiked stakes in their subsidiaries lured by long term potential of the country, while homegrown executives made their way to top hierarchy of global firms in 2013.
The FMCG sector, which is currently pegged at around $13.1 billion, also saw various challenges in the form of subdued demand despite good monsoon and bumper harvest that were expected to boost rural sales. Unilever, GlaxoSmithKline and PepsiCo made big bang announcements during the year as they decided to enhance their play in “strategic and emerging” Indian market.
Anglo-Dutch consumer goods giant Unilever PLC spent Rs 19,180 crore to increase its stake in the Indian arm Hindustan Unilever Ltd (HUL) to 67.28 % through an open offer.
Likewise, UK-based GlaxoSmithKline (GSK) also hiked its stake in its consumer healthcare arm in India to 72.5 % from the earlier 43.2 % stake in a transaction worth Rs 4,800 crore.
Towards, the end of the year, the UK-headquartered firm also announced plans to raise stake in its Indian pharmaceutical arm for a total consideration of Rs 6,389.02 crore. The year also saw global beverages and snacks major PepsiCo announcing to invest, along with its partners, Rs 33,000 crore in the Indian operations, as a part of which it announced to set up the company’s biggest beverages plant in Andhra Pradesh at an outlay of Rs 1,200 crore.
PepsiCo’s announcement came more than a year after its arch rival Coca Cola had said it, along with partners, would invest $5 billion in India by 2020 on various activities, including setting up of new bottling plants.
“If demand starts improving in first quarter of 2014 calender year, it would be not only due to monsoon but higher spending in tier II and tier III cities and rural areas ahead of forthcoming elections,” Prabhudas Lilladher Senior VP Research Amnish Aggarwal told PTI.
When it came to mergers and acquisitions, home grown firm Godrej Consumer Products led the pack by acquiring Colgate-Palmolive’s Soft & Gentle brand for an undisclosed amount.
