ABOUT PIDILITE

Pidilite Industries (Pidilite) is a chemical company engaged in the development, manufacture and marketing of chemicals various adhesives and sealing materials. The company's products include adhesives and sealants, construction and paint chemicals, automotive chemicals, art materials, industrial adhesives etc. The company operates in India, Middle East, Australia, US, Brazil, Singapore and Indonesia.

COMPANY PROFILE
Pidilite - established as a partnership firm Parekh Dyechem Industries in 1959 Started by three brothers -Mr. B K Parekh, SK Parekh and H K Parekh Name changed to PDI Industries after merger with Kondivita Industries in 1984 Merged with Pidilite Industries in 1989 Merged name changed to Pidilite Industries Launched Fevicol Brand in 1959 Pidilites mainstay of earnings is consumer & industrial adhesives and sealants

MAJOR BRANDS
Company has in total 40 brands spanning 400 industrial and consumer products.
FEVICOL CYCLO STARGENT ART Dr. FIXIT M-SEAL etc

PRODUCTS
CONSUMER AND CRAFTSMEN INDUSTRIAL SPECIALITY

CONSUMER & CRAFTSMEN

Adhesives & Sealants Art Materials & Stationary Construction Chemicals Automotive Chemicals Fabric Care Publications Wood finishes & Paints

INDUSTRIAL SPECIALITY Industrial Adhesives Textiles Chemicals Organic Pigment Powders Industrial Resins Leather Chemicals

How did Fevicol become Fevicol- The Brand

65% of furniture production in India is out of wood The carpenters play a vital role in deciding which adhesive to use First mover advantage INITIAL STRATEGY
Help carpenters realize the importance of using quality products.

FOLLOW UP
Maintaining close contacts with its primary target audience

MARKETING STRATEGIES
Focus on quality Building strong bonds with the industrial users. Connecting with consumers through ads. Innovative products To summarize, consistent quality, widespread distribution networks, and excellent customer relationships have been the key success factors for the company.

SWOT ANALYSIS
STRENGTHS

Strong Marketing & Advertising skills

Innovative products Focus on quality Large product line Fevicol is an immensely strong brand. It is so strong that anything that has a prefix 'Fevi' to it sells without any effort by the shopkeeper. Pidilite earns 51% plus revenues from adhesives segment (Fevicol, M-Seal etc) whose brands have excellent recall value.

WEAKNESSES
Pidilite seems to have strong R&D capabilities when it comes to adhesives and home construction/care. But for the rest, they seem to depend on acquisitions. Pidilite has grown its net profit at only 21% CAGR in the past 10 years.

OPPORTUNITIES
Growing chemical industry in India Tremendous growth opportunities for Home specific stores like- Home Town & Home Shop

THREATS
Cost of products largely dependent on crude oil prices Competitors 51% of their revenues are from adhesives/sealants and the raw material for this is petrochemicals which in turn is dependant on crude oil prices.

Current Position
The Company achieved 18.9% growth in net sales Due to the slowing down of Indian economy and weak economic conditions in US & Europe, sales growth in the second half of the year was lower than that recorded in the first half. Growth was impacted, largely in the Speciality Industrial Chemical segment, where the growth was 9.5% as compared to 24.4% in the previous year

 The Consumer and Bazaar Segment grew by 22.8%, in line with past trends Earnings before interest, taxes, exceptional items and foreign exchange differences, increased by 8.10%, profit before tax (PBT) increased by 11.8% and profit after tax (PAT) increased by 10%. The Companys sales have grown at a CAGR of 18.2% over the last five years.

Consumer & Bazaar Products

Branded Consumer and Bazaar Products Segment contributed 79% of the total net sales of the Company and grew by 22.8%. Net sales of branded Adhesives and Sealants grew by 24% and contributed 51% of the total sales of the Company. Construction and Paint Chemicals grew by 24.6% and Art Materials and other products grew by 14%. Consumer and Bazaar Product sales have grown at a CAGR of 17.6% over the last 5 years. Profit before interest and tax for the Consumer and Bazaar segment increased by 13%.

Companys Revenue Consumer & Bazaar Products

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Company Revenue Industry Products

Speciality Industrial Chemicals contributed 20.6% of the total sales of the Company and grew by 9.5%. Consists of following sub-segment
Industrial adhesive(8%) Industrial resins(7%) Organic pigments and preparations(6%)

FUTURE PROSPECTS
Pidilite Industries near-term prospects looks to be stable. The company is focusing on the branded products business, through relaunching and repositioning its existing brand in order to retain its market share. Pidilite is planning to hive of its chemical business, which is going to put a greater emphasis and focus of the management towards the branded products business. With the current focus on brands and its strong distribution network, the company operations are likely to show healthy profitability in the coming days.

QUESTION 1
Does Fevicol qualify as a brand bigger than the company? What might be the implications of this? What are the possible solutions?

Fevicol Bigger than the Pidilite

1. 2. 3. 4. 5. 6. First movers advantage Effective advertising Starting at ground level Good distribution Brand preference Only point of contact with customers

Implications
1. Promotion strategies are concentrated around FEVICOL 2. Over exploitation of the prefix Fevi 3. Ignorant towards other brands 4. Market reputation

Suggestions
Promotion of other products of Pidilite New range for fevi products stationery specific Fifth P packaging Fevicol star product User friendly CONSUMER AWARENESS CAMPAIGN

Question 2
Should the brand Fevicol be extended? If yes, then when, where, and how should this be done?

 Yes , Fevicol can be extended. When? Right now How? Direct export Acquisition Target? Industry segment

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PRESENTED TO:
ANOOP R OHRI

PRESENTED BY:
RAJAT SHARMA NAVDEEP THAKUR SHIFALI KANIKA JAIN GEETIKA PRABHAKAR ABHISHEK GOSWAMI