Godrej Consumer Products’ Strategic Shift: Cutting Global Manufacturing by 40% by FY26

Godrej Consumer Products Ltd (GCPL) has unveiled ambitious plans to streamline its global manufacturing operations, aiming to shrink its footprint by 40% by FY 2026. This initiative is part of a broader strategy to optimise costs, enhance profitability, and reinforce its commitment to manufacturing in India.

Currently, GCPL operates 36 manufacturing facilities globally, with 14 located within India. The company recently invested ₹1,000 crore in establishing two new manufacturing sites in the country, signalling its strategic focus on domestic production.

Sudhir Sitapati, Managing Director of GCPL, highlighted the company’s strategic reassessment of its international manufacturing footprint. This reassessment includes evaluating the feasibility of shifting production from international locations to India for exports. Sitapati emphasised the importance of aligning manufacturing capabilities with market dynamics and operational efficiencies to drive sustainable growth.

Despite challenges such as subdued consumer demand in the Indian market, GCPL achieved a commendable 7% organic volume growth. This growth trajectory is consistent with its targeted high single-digit growth for the fiscal year. The company attributed this resilience to its adaptive strategies in navigating market challenges and seizing growth opportunities.

In addition to optimising manufacturing, GCPL has undertaken significant organisational changes aimed at enhancing efficiency. These changes include restructuring management roles to create larger, more impactful positions and introducing advanced tools to modernise operations.

Looking ahead, Sitapati reiterated GCPL’s commitment to achieving robust volume growth in India, setting ambitious targets of 9-10% annually. The company aims to achieve this through a disciplined approach to reducing costs, reallocating resources towards profitable growth initiatives, and maintaining a focused portfolio. GCPL also aims to strengthen its market position through strategic acquisitions, such as the recent acquisition of Raymond’s consumer care business for ₹2,825 crore, which included valuable intellectual property rights.

Overall, GCPL remains steadfast in its pursuit of sustainable growth and market leadership. By consolidating its manufacturing operations, optimising costs, and leveraging its strong brand portfolio, GCPL is well-positioned to capitalise on emerging opportunities and navigate future market dynamics effectively.

On July 18, 2024, the share price of Godrej Consumer Products Limited opened at ₹1,440.00, touching the day’s high at ₹1,459.95, as of 11:19 AM on the NSE.

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