Emerging markets the new focus forReckitt boss

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The Independent Online

Reckitt Benckiser's new boss, Rakesh Kapoor, took a gamble on emerging markets yesterday as the consumer goods giant wrestles against sluggish growth and fierce competition in the West.

Mr Kapoor, who took over from Bart Becht last September, is leading a push into 16 faster-growing "powermarkets" and cracking down on costs across the group in hard-pressed Western markets.

Reckitt is also channelling an extra £100m investment into its leading health and hygiene brands which include Durex, Nurofen, Dettol and Harpic.

Mr Kapoor said 2012 would be a year of "transition and investment", and warned: "With slower market growth and increased competition, we need to reshape our strategy."

Reckitt expects its global market to grow by a sluggish 1 to 2 per cent this year, but Mr Kapoor is hoping to increase sales at double that rate by emphasising the company's health and hygiene products. These generate the highest profit margins and the strongest growth and consumer loyalty, and should account for 72 per cent of its core business by 2016, up from 67 per cent now.

This leaves Reckitt's foods and pharmaceuticals businesses, which include the heroin treatment Suboxone, out in the cold, while it is also looking at closing down its non-branded private label business.

Mr Kapoor wants to take emerging market exposure to 50 per cent of group revenue, from the current 42 per cent, by 2016. Sales fell 1 per cent in Europe, in contrast to emerging markets, where sales roared ahead 13 per cent. Overall sales were up 12 per cent to £9.5bn last year.

Reckitt employs 21,000 worldwide, and raised the spectre of job cuts yesterday as it pencilled in £75m in costs this year for the merger of its European and North American divisions.