New Delhi, July 5: Nature’s Essence, the herbal personal care product company, is planning to invest around Rs 12 crore in the first phase of a retail rollout that will see it opening stores in 25 cities.
With a 200 per cent annual growth rate, the company aims at increasing its revenues to Rs 100 crore this year. At present, its revenue is Rs 40 crore.
Saurabh Nanda, executive director of Nature’s Essence, said, “We will initially go to tier II or smaller cities and then to big cities.”
“The rentals and promotion costs are a safer bet here,” he said. Initially Nature’s Essence will lease properties to set up stores. At a later stage, it plans to buy its own properties.
In the first stage the rollout will be confined to north India. Nanda said, “From July to December this year, we will go to cities such as Chandigarh, Ludhiana, Delhi, Amritsar, Jaipur and Rohtak.”
In the second phase, which will start in January 2009, the company plans to focus on south Indian cities such as Bangalore, Chennai and Hyderabad. “We are planning to spend around Rs 15 crore in this phase when we will be going to another 25 cities,” Nanda said.
“We are expecting a 20 per cent profit generation from the organised retail chain. Most of our profit comes from the traditional retail trade,” he said.
All 200 products of Nature’s Essence will be present in its own stores, which will not stock products of other companies. Apart from its newly launched “Coloressence”, it is planning to introduce the Spa range in the next two-three months.
At present, it has a manufacturing unit at Hardwar with a production capacity of 100 tonnes. A new unit is coming up at Kotdwar in Uttarakhand with a production capacity of 300 tonnes, which will start operations in April next year. Nature’s Essence is also planning to raise around Rs 200 crore through an initial public offering in December 2009 to fund these activities.
Early next year, the company is also planning to foray into organic food at an investment of Rs 10 crore. The manufacturing will initially be contracted out till the company sets up its own unit.
