Marico - Managing 'Saffola'
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Case Code : MKTA005
Case Length : 14 Pages
Period : 1990-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Marico Industries
Industry : FMCG, Fast Moving Consumer Goods
Countries : India
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
Background Note Contd...
In 1948, Bombay Oil Industries Limited (BOIL) was established, by the family with facilities for coconut oil extraction, crushing and refining of vegetable oils. BOIL set up four manufacturing plants between 1947 and 1971- at Sewree for coconut oil extraction, at Mazgaon for refining vegetable oils, a chemical plant at Bhandup, all the three in Bombay and a spice extraction plant near Cochin, Kerala.
Vallabhdas had four sons Charandas, Jayasinh, Hansraj and Kishore, all of whom were engaged in the family business. The eldest, Charandas was the Chairman and Managing Director of BOIL while his younger brothers were on the Boards of Directors of BOIL and its subsidiaries.
In 1983, BOIL formed three divisions - the Consumer products division, Fatty acids and Chemicals division and the Spice Extracts division. Harsh, the only son of Charandas, who joined the family business in 1971, developed the Consumer Products business in BOIL and functioned as Executive Director from 1980 to 1990.
In the 1980s, the next generation of Mariwalas entered the business. In April 1990, BOIL was restructured from a single corporate entity into a multi-corporate entity. Accordingly, five companies commenced business by taking over the various businesses of BOIL. (Exhibit: I). The Consumer Products division was hived off as a separate company and the newborn entity was named Marico Industries Limited (Marico).
Harsh took over as the Managing Director of Marico in 1990. The major operating divisions of Marico were Nature Care, which had products like coconut oil, hair oils and fabric care, Health Care with edible oils and processed foods and International Business and Distribution, to take care of overseas business. Marico made its Initial Public Offer in March 1996.
Marico had its own manufacturing facilities at Goa, Kanjikode (Kerala), Jalgaon (Maharashtra), Saswad (Maharashtra), Pondicherry and Daman. These facilities were supported by sub-contracting units. Marico also planned to set up a manufacturing division for its hair care products in Uttaranchal, in 2004...