The consumer goods maker says that it will separate its Kaya cosmetics business to create an individual division as part of restructuring aimed at sharpening the focus of the business.
The Kaya division incorporates over 100 Kaya skin clinics and Derma Rx clinics, which are based throughout India, Bangladesh, Singapore, Malaysia and the Middle East.
The company launched the Kaya business in 2002 and expanded the presence of its beauty clinics significantly in 2010 with the acquisition of the Singapore-based Derma Rx Asia Pacific business.
Kaya records significant growth
The division, which currently accounts for approximately 7 percent of Marico’s annual revenues, has been expanding significantly, particularly since the acquisition of the Derma Rx business.
One of the main driving forces behind that growth has been created by the high margins skin care products from the extensive portfolio of Derma Rx.
The products have been developed to address a range of specific skin care issues, including pigmentation disorders, acne, pores, scare and fine lines.
Kaya business culture is different
However, the board of directors stated their belief that the Marico company culture is not entirely compatible with that of the Kaya business, and concluded that the logical next step to help promote further growth would be to separate and create a new division.
"Kaya is a feminine business; 85 percent of Marico's employees are male, which created a macho system that did not understand the requirements of Kaya where 85% of employees are women," Milind Sarwate, CFO at Marico, said.
The plan is to list newly formed Marico Kaya on the Bombay stock exchange and the National stock exchange, as well as giving the business its own board of directors, who will be autonomous to that of the Marico board of directors.
Marico has a presence in 25 markets across Asia and Africa holding both international and Indian brands that cover the personal care, food, household and even electronic cosmetic devices.