JL Morrison scouts for FMCG brand

J L Morrison (India), the erstwhile owner of Nivea brand in India, has set aside Rs 50 crore (Rs 500 million) for acquisition of a new FMCG brand. Part of the amount will come from the post-severance package received from Germany-based Beiersdorf AG.

The company had received Rs 18 crore (Rs 180 million) from BDF for granting a 'no objection' to the use of the Nivea brand in India as well as for other support. Besides utilising a portion of the sum for acquisition, the company is now planning to promote its Morrison brand through a series of launches.

The company will spend close to Rs 15 crore (Rs 150 million) for establishing the Morrison brand in baby care segment as well as in toiletries. Earlier, personal care products were sold under the Nivea brand.

The company has already soft-launched its shaving range and other products under the Morrison brand.

BDF, the owner of Nivea brand, assumed the marketing rights from JLM last year.

The German personal care product major has floated an Indian subsidiary called Nivea India, which now owns the Nivea brand in Kolkata.

JL Morrison Chairman  Raghu Modi said the company currently had reserves of Rs 60 crore (Rs 600 million) and a majority of this would be utilised for acquisition.

"We are looking for suitable acquisition opportunity," he said. According to Modi, the company was getting a good response for its baby care range of products launched recently.

Last month, the company launched soaps, powder, body lotion and nappies.

The company had also launched personal care products such as cologne and shaving cream under the Morrison brand. "We shall invest Rs 10-15 crore (Rs 100 to Rs 150 million) to establish the Morrison brand," the chairman said.

Elaborating on the move, he said the foreign companies with whom JL Morrison was associated would always be vulnerable to mergers and acquisitions by other large companies. So, this was the right time to develop its own brand.

According to Modi, the company had received Rs 18 crore (Rs 180 million) from BDF for granting 'a no objection' to the use of Nivea brand in India by Nivea India and also for repositioning of arrangements with BDF upon termination of the old agreements.

The company now manufactures the Nivea range for the BDF subsidiary and also works as the distributor for the products.

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