Indian FMCG companies foresee healthy growth

After registering a 12% growth in 2009 despite the economic downturn, major FMCG firms remain optimistic and expect a 15% growth in 2010 from the previous year. Key players such as Godrej Group, Dabur India and Wipro Consumer Care & Lighting have predicted favourable conditions for another solid performance for the year. Robust growth momentum is expected to be aided by increased rural incomes, taxation benefits and gradual shift from the unorganised sector. Over the last decade, the Indian FMCG industry has reached a size of US$25 billion from US$9 billion.

Major FMCG players are focusing on expanding their global presence by acquiring companies in niche segments to fill gaps in their product portfolio. The companies are also increasingly spending on Research and Development so as to maintain their momentum in launching new products. Better reach from significant investments in distribution infrastructure and higher advertisement spending will also be the key drivers for growth. However, some market experts believe that the good run may soon run out of steam as rural growth begins to flatten out and inflation restricts companies from taking any sort of price hikes..