Cavinkare to restructure business

In a first step towards a succession plan, Chennai-based fastmoving consumer goods (FMCG) major Cavinkare on Monday announced restructuring its businesses and also roped in the next generation, giving them charge of business verticals.

Announcing this, C K Ranganathan, chair- man and managing director of Cavinkare, indicated the business would be split into mainly four different streams -- FMCG, e-commerce, retail, and research and development.

The transformation — termed as Cavinkare 2.0 by the company — is also seen as a step towards its initial public offering (IPO). Director and CEO Venkatesh Vijayaraghavan has been elevated as group chief executive officer in charge of the FMCG business. Ranganathan’s son Manuranjith Ranganathan has been entrusted with the retail segment and daughter Amudhavalli Ranganathan has been appointed head of e-commerce. However, Ranganathan will continue to be in charge of the research and development division. When asked if the move could be seen as a first step towards a succession plan, he said, “Absolutely, somewhere people should learn.” While Manuranjith, also in charge of the dairy, hospitals, bakery and salon divisions, will be directly reporting to his father, Amudhavalli will be reporting to Vijayaraghavan because FMCG and e-commerce businesses are interlinked. Ranganathan said through the current restructuring, the group’s aim was to achieve a turnover of ~5,000 crore in the next few years and will also invest around ~900 crore across various verticals in the next three years.

“FMCG will continue to be big but dairy will have an opportunity to overtake it. Investment in the dairy segment will be close to ~400 crore and the balance will go for ecommerce, digital, hospital and retail expansions,” he added. At present, the group’s revenue is around ~1,700 crore.

“There is a definite drop in revenue due to the pandemic as several of our businesses were affected; otherwise we would have crossed ~2,250 crore by now. Our businesses are around 92 per cent of the pre-covid level,” Ranganathan said. Raising concern on the rising container shortage and raw material price hike, he said companies were involved in “cartelisation” in both the businesses. “We are not able to meet the demand and import and export are facing problems due to container shortage.”

Director Venkatesh Vijayaraghavan has been elevated as group CEO in charge of the FMCG business