Green Supply Chain

MARICO PERSPECTIVE

Marico : Snapshot
Beauty & Wellness Solutions
Hair Care, Health Care, Skin Care, Male Grooming

A leading Indian MNC Group

Market Capitalization
Turnover FY 16
Profit

FY 16

INR

USD

31,000 Cr

4.7 Billion

6,132 Cr

920 Million

573 Cr

110 Million

Turnover from overseas : 22%

Sustained Profitable Growth

Turnover

16%

Profits 19%

(5 yr CAGR)
2

Portfolio : Beauty & Wellness

Hair Care
Hair Nourishment
Oils/Serums/Tonic

Healthcare
Healthy refined edible oils
Oats

Male grooming/ styling

Deodorants
Hair Creams/Gels/Wax

Skincare
Body Lotion

What is supply chain ?

What is Green supply chain ?

Integrating Environment thinking into Supply Chain
Management, including product design, procurement,
manufacturing processes, delivery of product and end life
management of product.

Green supply chain Marico perspective

Product & process design

Procurement

Manufacturing

Logistics

Green supply chain Marico perspective

Product & process design

Procurement

Manufacturing

Logistics

Product & Process Design

Recycle
materials as
resources

Reform
Design for current
Or other use

Reduce
waste material

Reuse
1

Refuse

Waste material
without processing

Purchase of environmentally
burdensome materials
8

Product & Process Design

Majority products are oil based which natural oils like coconut oil,
sesame, sunflower, rice bran oil and herbal extracts
Natural colors are used in products
Zero toxin contents and no impact on biodiversity as formulations
are based on natural ingredients which are commonly traded
Recyclable material used in 98% of our products as packaging
material
Recycle

Reform

Reduce

1
Reuse

Refuse
9

Product & process design Material conservation

57
10
3.5

Projects of design & spec

optimization in last 4 years
Categories of Packing
material
Recycle

% Packing material / Kl
saved
Reform

Reduce

Reuse
Refuse

10

Product & Process Design

Lean processes are designed to reduced waste
Solid waste and byproducts are reduced year on year with efficiency
improvement projects
Packaging material design is most optimized as compared to
benchmarks through multiple innovation collaborating with
suppliers and technical expertise
Packing material is recycled as well as reused with stringent quality
protocols

Recycle

Reduce

Reform

1
Reuse
Refuse

11

Green supply chain Marico perspective

Product & process design

Procurement

Manufacturing

Logistics

12

Procurement - Spend
Packaging
Materials
13%

Chart Title

Agri.
Commodities
67%
Raw Materials
20%

13

Procurement Green Initiatives

Indigenization

Awareness
Training &
propagation

Disintermediation

Farmer
Remuneration
improvement

2
14

Indigenization
Long Term
Development of
Seeds

Program for High Oleic Safflower

Seed
Production with
Isolation

Effective deployment
on farms through
extension

Partners in development
DOR
Tamilnadu Agriculture University
(TNAU)

2
Target to reduce 50% import dependency by 2020
15

Disintermediation E-buying

Disintermediation E-buying Challenges

IT Literacy

Connectivity

Tech Support

Portal menu and SOP in local languages

Basic computer training to vendors
Second generation brought into the business

Tie up with local/nearby town internet cafe

Helped them select and buy computers
Designed SMS option

Lightweight and with many features

Integration of portal with SAP
Bidding engine with rate segregation and
reject features
Validation and Integration of SMS

Disintermediation - e-buying portal - Benefits

Vendors

Marico

Farmers/Convertors can sell directly

Access to archived data 24X7
Availability of quality data helps take corrective
action
Sense of belongingness - trust on MARICO
by enabling access to live info on SAP

Paperless transaction
Resource light model
Managerial time freed up from non-core activities
Real time data visibility

Enhanced supplier base reaching to small and marginal vendors

Disintermediation Collection centers

1. Collection Centres

2.

Started from 2003

Transparent and inclusive buying process for small and
medium size farmers
Assured buying channel for farmers

Kera Ratna program for Farmers

Loyalty program to incentivise farmers
Demonstration and training through Farm Care Centers

2
19

Copra Market & Collection Centre

Coconut Farmer
Coconut Farmer

Copra Converter

Copra Converter
Transportation
Charges/Brokerage

Local Broker/Transporter
Vandikaran
Commission

Vandikaran (Market Broker)

Trader Commission

Copra traders in terminal

market
Trader Profit

Oil Millers

Brokerage

Brokers
Collection Centre

Center Buying Process

Farmer brings copra to CC
Withdrawal of sample for Q Inspection
Quality Inspection
Moisture Analysis

Weighment of Total Lot

Preparation of payment document

Payment (Cash/ Cheque)

More than 50% sourcing through this route

( Over Half billion nuts )

Increasing farmer remuneration

Water Pumping
by selecting
electrified
villages
Partnering with
Netafim/Jain
Irrigation

Water Storage
Mechanisms

Improved
Profitability
Monitoring
through IT
enabled
platforms

Reduce cost by
getting them
subsidies
Growth
Promoters/POP
Dissemination

Increasing farmer remuneration

Safflower productivity
1.5
1
0.5
0

2
Productivity improved from 9%to 23%
23

Increasing farmer remuneration

Hybrid Coconut Sapling
Propagation
Scouting for innovation in ecosystem
Providing organisational support and
infrastructure to help scale up
innovations
Training programs /Free Samples
and Model Farms across TN & Kerala
200 coconuts/tree/year vis a vis 120
nuts by local variety
Starts yielding in 4 years vis a vis 7
years for local variety

2
24

Increasing farmer remuneration

Cluster Program in Kerala
Launched in 2007 in Kerala with Coconut Development Board
for boosting farmer income per acre by intercropping and
adequacy in fertiliser usage.
Marico led formation of clusters and program management to
ensure successful execution
8000 farmers enrolled and benefited so far.

25

Increasing farmer remuneration

Promoting Scientific Farm Management Practices
Pest & Disease Management Sessions/Booklet for Farmers
New Productivity Improvement Techniques training to Thanjavur District.
Almost 2 sessions per week with groups of 25 to 30 farmers

2
Apiculture

Biochar

Micro-nutrient
26

Green supply chain Marico perspective

Product & process design

Procurement

Manufacturing
Logistics

27

Manufacturing

VAHO
Paonta Sahib

Edible oils
Baddi

VAHO
Dehradun
VAHO
Guwahati

Youth category - Deos

Aurangabad

Perundurai
CNO OM
CNO
Kanjikode

Jalgaon
Edible oils

CNO
Pondicherry
Foods
Coimbatore

28

Sustainability Initiatives ( Renewable Energy )

Wind Power for Inhouse and suppliers
operations

Total KWH per annum to be

used from wind in locations

-20 L Units

Co2 emission in terms of Ton

1000 Tons of CO2

3
29

Biomass % in Energy consumption

100

73.9

80

82.6

83.8

FY '15

FY '16

Good

Manufacturing Renewable energy

60
40

37.6

Usage of renewable bio-fuels

Improvement
in
thermal
efficiencies in generation,
distribution and usage

20
0

Thermal Energy intesity GJ / KL

FY '13

FY '14

1.45

1.42
Good

1.4
1.35
1.3

1.24

1.25

1.2
1.15
FY '15

FY '16
30

Manufacturing
GHG Emissions tCO2 ( Scope 1 )
Good

16000

13821

12000
8000

5103

4000

3456

Consistent efforts YoY to reduce carbon

footprint through green energy
Solar illumination / LED lights
Process design improvements
Baddi unit is ISO 50001 certified

3213
GHG Intesity tCO2/Kl ( Scope 1+2 )

0
FY '13

FY '14

FY '15

FY '16

0.084

0.0834

0.082
0.08
0.078

0.076

0.076
0.074
FY '15

FY '16
31

Water conservation
Water Recycle

Zero Discharge

All units have treated waste

water recycling facility

All units are zero discharge

01

02
04

Water reduction
Edible unit of Jalgaon received
CII water conservation award

03

Water free Urinals

Corporate office has
installed water free urinals

3
32

Operations Excellence

Act Now!
Maricos Operations Excellence
Model

Developing lean
culture
Focus on efficiency
improvement
Capability building &
problem solving inputs
Green practices
Creating a visual
factory

3
33

Recognitions

National Energy Conservation Award

(Ministry of Power) -

CII Excellence in energy

management

State energy conservation award

National Energy Conservation Award

34

Green supply chain Marico perspective

Product & process design

Procurement

Manufacturing

Logistics
35

Logistics

13 Manufacturing units
32 depots
1100 distributors & stockists
Over 15 Lac retail outlets
Half Billion Consumers

4
36

Logistics
Pull based system
( Ship what sells )

Backhaul
( reduce idle
Run )

Route optimisation
( shortest route )

Truck Utilisation
( load efficiently )
37

Pull based system

Demand Driven Produce what sells

Reduced Wastages Materials, Expiries, Returns

Strong IT Infrastructure Faster Response

Replenishment led order Management System

4
38

Route optmization

Reduced miles on the road

Fuel saving decrease in carbon footprint

Hubrid distribution model to maximise efficiency

4
39

Truck utlization
Maximizing benefit through load maximisation

Appropriate selection of vehicles for each route

Correct SKU-mix to maximize vol/wght utilisation

4
40

Backhaul
Maximising vehicle run on road High asset RoI

Reduced idle time for business acquisition

Collaboration with Peers in Industry

Collaboration with transport vendors

Planning and TAT for loading/unloading critical

4
41

Green
Building

Maricos
Corporate Office
Is a

Green Building
Certified by
US Green Building Council
with

Gold Certification

42

What helped

Organisation purpose Make a difference

To transform in a sustainable manner,
the lives of all those we touch,
by nurturing and empowering them
to maximize their true potential

43

What helped

Inclusiveness Power of Members &

Associates
Measure and improve
Focussed program management
Challenging status quo
Sustenance
Pride among members
44

Business benefits

Inclusive Growth
Sustainable sourcing
Value enhancement

Sustainable Profitable Growth for company

45

Market Leadership: Key to Category Choice

Category

Indicative Market
Share (%) #

Rank

Penetration
Level

Coconut Oil (India)

~ 57%

High

Coconut Oil (Bangladesh)

~ 82%

High

Saffola

Super Premium Refined Edible

Oils (India)

~ 60%

Low

Saffola

Oats (India)

~ 25%*

Low

Hair Oils (India)

~ 30%

High

Male Shampoo (Vietnam)

~ 38%*

Low

Hair Styling (Egypt)

~ 58%*

Medium

Hair Gels & Creams (India)

~ 52%*

Low

Post Wash Hair Serum (India)

~79%

Low

Body Lotion (India)

6%

Low

Brand
Parachute/Nihar
Parachute

Parachute Advansed, Nihar

Naturals, Hair & Care
X-Men
Fiance / Hair Code
Set Wet / Parachute Advansed
Livon / Silk & Shine
Parachute Advansed Body
Lotion

Marico brands have a no 1 position in their respective segments over around 90% of its turnover
# Dec15 rolling 12 month volume market share data sourced from AC Nielsen
* Value Market Share

46

Business benefits

Sustained stock performance against industry index

47

"We are what we repeatedly do.

Excellence, then, is not an act, but a
habit."
- Aristotle

48

Thank You

49