Chennai-based FMCG major CavinKare has announced key changes to its business and leadership structure. Acknowledging that it was "time to give way to the next generation", the company's founder and chairman, CK Ranganathan, announced that his son, Manu Ranjith, and daughter Amudha, would assume key leadership positions at the company.

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He added that CavinKare would be divided into four divisions — retail, e-commerce, FMCG and innovation — each headed by a separate member of the company’s leadership team, including Ranagathan, himself.

While Manu Ranjith and Amudha Ranganathan will head CavinKare’s retail and e-commerce verticals respectively, company director and CEO, Venkatesh Vijayaraghavan will be in charge of FMCG. Ranganathan said he would take over the company's innovation division: "It (innovation) is my forte; I would like my focus to lie there."

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Under the new leadership structure, Amudha will report to Vijayaraghavan, while Vijayaraghavan and Manu Ranjith will report to Ranganathan who continues to remain group chairman.

'Want to clock Rs 5,000 crore in revenues'

"The company would like to bring a new structure and vision," said Ranganathan while announcing the slew of changes, "Under the new structure, CavinKare 2.0 will prioritise high growth as we focus on innovation, e-commerce and bringing about synergies."

Under the new corporate structure, the group’s chain of bakeries, CK Bakery, will be led by Manu Ranjith under the retail division. Incidentally, Manu will also take over CavinKare’s Green Trends and Limelite chain of salons, and the group’s dairy business. Personal care, food, snacks, beverages and international business will be overseen by Vijayaraghavan under the FMCG vertical.

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"The new structure will take us to a 5,000-crore-rupee company in terms of revenues over the next five years," said Ranganathan, "We are currently growing at a rate of 20 to 22 percent, which is not good enough. Most of our divisions are in infancy and need to grow at between 100 and 150 percent, for which restructuring is important."

Acknowledging that new-age companies growing at a rapid pace have a strong e-commerce base, Ranganathan said traditional business structures and approaches wouldn’t suit the company’s e-commerce ambitions. In the light of this, Amudha Ranganathan, is slated to head a separate team to boost the company’s e-commerce division, which the company hopes will contribute 25 percent to its revenues by 2030.

'No IPO plans for now'

Ranganathan clarified that none of these changes were being made in order to take CavinKare public and that plans for an IPO were not in the offing. “We are not doing this to issue an IPO but to drive growth,” he said, “We need to grow aggressively given our size."

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In order to make good on this re-structuring, CavinKare plans to invest between Rs 800 and 900 crore in factories and new brands over the next three years. "Our salons alone will see Rs 150 crore in investments," said Ranganathan, "The Dairy vertical has a big opportunity to overtake our FMCG business and will attract 50 percent of our future investments as we look to invest in a lot of point-of-sale material." The remainder of these investments, he added, would be made in e-commerce, digital and retail.

'Revenues at 92 percent of pre-COVID levels'

At present, CavinKare is recording close to Rs 1,700 crore in revenues, with the pandemic keeping earnings muted. "There has been a drop in revenue since the pandemic; we could have clocked Rs 2,250 in revenues otherwise," said Ranganathan "Salons were shut for the longest time and with schools continuing to stay closed, our dairy products have also been struggling."

On the bright side, CavinKare's personal care products have compensated for the shortfall in revenue and have continued to grow as have the snacks and beverage business. "Our revenues are presently 92 percent of pre-COVID levels, and if a third wave this number could go down to between 25 and 30 percent," said Ranganathan.

'Looking to open more bakeries and salons'

At present, the company is working to expand its salon presence from 400 to 1,000 branches, while actively looking to increase its bakeries from 86 to 1,500 across South India. “We want to consolidate the bakery business in the South before taking it nationally,” said Ranganathan.

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CavinKare gained prominence in the mid-1990s when the company was credited with bringing about India’s sachet revolution, after introducing tiny sachets of its Chik shampoo at affordable prices. The company re-gained prominence at the beginning of the pandemic early last year when it did an encore and launched hand-sanitiser sachets priced at Re 1 per sachet.

Around the same time, CavinKare announced permanent work-from-home for all its employees, as it announced that it was shutting its corporate office and other work spaces.

(Edited by : Jomy Jos Pullokaran)

First Published:Aug 30, 2021 8:09 PM IST