Marico acquires Oil of Malabar
By Ananth Koovappady | 30 Oct 1999
Oil of Malabar, a coconut oil brand, with an all India market share of 3.2 per cent, clocked a turnover of over Rs 12 crore for the year ended 31 March 1999. It has a national presence and a significant franchise in south India with an 8 per cent market share. The brand has a reach of about 1.6 lakh outlets, of which about 1 lakh are in rural areas.
The understanding with West Coast gives Marico rights to all associated business and commercial rights. 'Oil of Malabar' will continue to be distributed, on mutually acceptable terms and conditions, through West Coast's sales and distribution network, which has a strong rural bias.
This acquisition comes in the wake of a challenge posed to its leadership by multinational giant Hindustan Lever Ltd, which recently strengthened its presence in this category with its acquisition of the 'Coco Care' brand from Recon Oil Industries. While analysts believe that HLL is not likely to prove an immediate threat to Marico's supremacy, thanks to the huge brand loyalty that its premier brand – Parachute – enjoys, the organisation and distribution muscle of HLL may just prove dangerous for Marico.
Marico currently leads the branded coconut oil market with a share of over 50 per cent through its flagship brand 'Parachute'. This acquisition helps Marico in further consolidating its clout in the coconut oil market.
With the sale of these brands, West Coast intends to focus on its other businesses.
Ambit Corporate Finance Pte Ltd. acted as advisor for the transaction.
