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Dabur plans to use Dubai as base for overseas expansion
Dabur India, a company that was originally founded in the 19th century, is planning an aggressive overseas expansion and plans to use Dubai as its base.
- PUBLISHED: Mon 28 Jul 2003, 11:52 AM UPDATED: Tue 22 Nov 2022, 10:44 AM
- By:
- Rajendra Bajpai
Dabur is well-known in India for its herbal products and foods. It makes Indian Ayurvedic medicines and most of its consumer goods are also made from herbs.
Dabur has a franchisee in Dubai, Redrock Ltd., which has two manufacturing facilities -- one in Sharjah and another in Dubai. It also has subsidiaries in Nepal and Egypt but the company is now focusing on Dubai which would concentrate on overseas markets.
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Dabur India is now in negotiations with Redrock to take full control of it or have a controlling stake in the company.
"We are negotiating a takeover of the entity to either make it a wholly-owned subsidiary or take substantial control to give a fillip to our overseas presence," said Sunil Duggal, CEO of Dabur India. This is expected to happen by the end of the year.
Redrock has the franchise to manufacture and market Dabur's shampoos, hair oils and other products. It markets them mainly in West Asia. Redrock's annual turnover is estimated at Rs 350 million.
Dabur recently restructured its operations in India and now wants to restructure its overseas business.
"Instead of getting a royalty from the franchisee, we can house it in a subsidiary and get complete control over the business," Duggal told Business Line newspaper.
"It would be pivotal to our overseas strategy as it has a large integrated manufacturing base that services overseas markets."
Duggal said the plan is to set up an international business division in Dubai which will oversee the operations of overseas subsidiaries.
"A lot depends on discussions with the franchisee," he said. "However, the business model for the international business division is in place." Dabur also does not expect a great deal of competition from foreign companies. Its products are almost unique and based on India's ancient Ayurvedic medical science and practices.
Dabur has more than 200 products and it has grown into a giant. But its beginnings were humble. Dabur was founded in 1884 in Calcutta where Dr. S.K. Burman practised Ayurvedic medicine . Everybody called him Daktar -- a lot of people in India still call doctors Daktar. Dr Burman put together Daktar and Burman to call his company Dabur.
The company, listed on stock exchanges, is now run by fifth generation of Burmans who have left the day-to-day operations in the hands of professionals. Dabur India has six subsidiaries and their combined sales in the year to last March 31 was Rs 13.7 billion. The group's net profit was Rs 910 million.