Colgate: A SWOT analysis
By Equitymaster.com
A name synonymous with the Indian oral care industry, Colgate (COLGd.BO, news) , is the undisputed market leader in toothpastes with over 45% share in the Rs 21 bn (90,000 TPA) oral care segment. The company's parent has a presence in over 200 countries worldwide. In India, Colgate ranks No.1 in top of the mind recall in many consumer surveys. Let's take a look at the company's journey over the years and what's in for it in the future.
Background
Promoted by Colgate-Palmolive USA, the parent operates through its 51% subsidiary and has a presence in India since last 50 years. The company's flagship product, Colgate Dental Cream is the largest selling toothpaste in India, with an estimated market share of over 30%. The company acquired Hindustan Ciba Geigy (Cibaca) in the year 1994, which helped it increase its market share. The company also has a significant marketshare in the toothbrush category. This and shaving brushes accounted for 10% of its FY04 revenues.
The toothpaste segment can be divided into two broad categories: White's, which accounts for a dominant share of the Indian oral care market. Gels are estimated to be only about 15% plus of the market.
Colgate is considerably backward integrated. It has captive manufacturing facilities for flavor and other ingredients, which yield significant cost savings. It has also set up a world-class facility for manufacture of Di-calcium Phosphate, a key ingredient in toothpaste.
The journey over the years'
(Rs m) FY00 FY01 FY02 FY03 FY04 CAGR 9mFY05
Sales 10,896 11,769 11,609 9,474 9,392 -4% 7,242
Other Income 228.9 295 310 358 299 7% 217
Expenditure 10,231 10,801 10,544 8,170 7,928 -6% 5,995
EBDIT 665 968 1,065 1,304 1,46 ...