Marico announces re-structuring; to form Marico Kaya Enterprises

Saugata Gupta will be CEO, Marico and Vijay Subramaniam will be CEO, Kaya. The changes will be effective from April 1. Meanwhile, Ajay Pahwa, CEO, Kaya, has decided to leave the organisation.

Consumer products and services company Marico has decided to consolidate its FMCG business and de-merge brand Kaya such that it will be listed separately as Marico Kaya Enterprises.

Marico's consumer products business in India (CPB) and international business group (IBG) will now form a unified FMCG business, and Kaya will be re-defined as a separate business entity.

So far, Marico was the main corporate entity that owned all businesses in the group. Now, through the portioning of this entity, the company proposes to create two separate companies, namely, Marico Limited (an FMCG business company that already exists) and a 'Kaya business company' (which will be called Marico Kaya Enterprises Limited and is yet to be formed). Apparently, the working title/brand name of the latter is 'MaKE'.

Regarding the convergence of businesses in the CPB and the IBG, the press note issued by the company reads, "The business portfolios of CPB and IBG businesses are increasingly mirroring each other, especially after the company acquired the portfolio of youth brands including Set Wet, Zatak and Livon earlier this year."

About the Kaya demerger, the note states, "The company strongly believes that for the next phase of its 'value creation' journey, the Kaya business should be run in an entrepreneurial manner independently from the FMCG business of Marico."

Therefore, the days ahead will see resurgence in the Kaya business through a distinctly entrepreneurial approach, independent leadership team and more customised ways of managing Kaya-specific talent.

All these changes will be effective from April 1.

MaKE will have its own board of directors that will be separate from that of Marico's. Like Marico, MaKE will also be listed on the BSE and the NSE.

Harsh Mariwala will continue to be the chairman and managing director of both entities, Marico Limited and Marico Kaya Enterprises Limited.

Further, effective April 1, Saugata Gupta will be CEO, Marico and will lead the company's overall FMCG business, while Vijay Subramaniam will be CEO, Kaya and will be in charge of the Kaya business in India and overseas. Both will continue to report to Mariwala.

Currently, Gupta is CEO, consumer products business, Marico while Subramaniam is CEO, international FMCG business, Marico.

It may be recalled that Gupta joined Marico in January, 2004 as head, marketing and took on the additional mandate of heading the sales function in 2006. He was named CEO of the consumer products business in 2007.

Subramaniam, on the other hand, joined Marico in March, 2006 and has, since, seen the company through five acquisitions and growth in emerging markets outside India.

Also noteworthy is the decision of Ajay Pahwa, CEO, Kaya, to leave the organisation to pursue an entrepreneurial venture. Pahwa, who has spent three years at the company, will continue to play his current role till April, 1.

It is also learnt that the finance function will continue to be centrally organised and will act as a Shared Service Group (SSG) for both Marico and Kaya. Milind Sarwate, group CFO, will continue to report Mariwala. However, the HR functions for the two companies (Marico and Kaya) will be separate.

For the record, Kaya is a skincare solutions brand that offers a number of services including laser hair reduction and anti-ageing procedures, amongst others. Early last year, the brand underwent a re-positioning exercise and launched a new brand identity, logo and tagline. At the time, the brand changed its positioning stance from 'an expert solution provider for skincare problems' to 'a personal guide for total skin care'. The tagline was changed from 'Let Your Skin Talk' to 'Love What You See'.