The ongoing adversity due to the coronavirus pandemic opens opportunities to enhance stakeholder value and the company is adequately prepared to capitalise on sectoral opportunities, according to homegrown FMCG major Emami founders, R S Agarwal and R S Goenka. In their joint address to shareholders in the company’s annual report for 2019-20, they said Covid-19 aggravated what, until the start of the last financial year, was only a cyclical slowdown.
“A farm sector slowdown affected rural consumption. A delayed winter affected the offtake of winter portfolio/products. A sluggish macroeconomic environment resulted in a decline in consumer spending on discretionary products,” Agarwal and Goenka said.
A combination of these factors affected the performance of the FMCG sector, which reported one of the slowest growth rates in years. This slowdown affected the performance of Emami as well, they added.
However, Agarwal and Goenka said, “The disruption may be temporary; the resilience is enduring. We believe that this ongoing adversity opens opportunities to enhance stakeholder value.”
They further said, “Emami is adequately prepared to capitalise on sectoral opportunities. The company’s power brands possess attractive headroom, which could drive Emami’s growth in a sustainable way.”
With an eye on addressing the growing demand for hand sanitisers following the outbreak of Covid-19, Emami had launched hand sanitisers under its flagship antiseptic brand BoroPlus.
The company also prioritised the launch of BoroPlus Advanced AntiGerm hand sanitiser and this was followed by the launch of an ayurvedic hand sanitiser under the Zandu brand and a hygiene products range under the BoroPlus brand.
“We believe that sustainable companies possess strong brands that generate multi-year revenues. The company introduced innovative brand extensions, strengthening their relevance across the seasons,” the founders of the Kolkata-based firm said.
In order to overcome the challenges of the global health crisis, Emami is working on the pharmacological studies of ayurvedic ingredients and reinforcing their efficacy, herb effectiveness, scientific data aggregation and global product acceptance.
“To strengthen our research, we collaborated with government research institutions and the Ministry of Ayush to introduce research-based products that targeted lifestyle diseases,” they said.