The $2.5-billion Godrej group has disbanded the FMCG portfolio cell (FPC) following the appointment of Arumugan Mahendran as managing director of Godrej Consumer Products (GCPL), a Godrej spokesperson told Financial Chronicle. Mahendran, who was also the MD of Godrej Sara Lee (GSL), was heading FPC.

FPC was the key body driving synergies and strategy across the group’s FMCG companies spread over GCPL, GSL (now Godrej Household Products) and Godrej Hershey.

Naveen Gupta, who was earlier head of the M&A function in FPC, has been appointed as COO of PT Megasari Makmur. “He now runs initiatives in South-east Asia while Omar Momin, earlier in charge of strategy at FPC, now looks at M&A along with Mayur Savla,” said a top Godrej official.

“Instead of FPC, we now have a strategy cell that’s headed by Vivek Gambhir (ex-Bain & Co), Momin, Savla, Avinash Suresh and Nupur Gurbaxani,” said the Godrej spokesperson.

“Ravi Venkateshwar has been appointed as COO at Godrej Household Products (GHPL) where I am also a whole-time director,” said Mahendran. Mahendran is also a director and shareholder of Godrej Hersheys, which is headed by Vivek Mathur.

The results of the exercise are expected to start showing after the third quarter of 2010-11. “We expect the full impact of the synergies to be reflected in the consolidated results of GCPL post Q3 of this fiscal year and will last well into the next financial year,” said Mahendran.

On the cost side, the group is expected to take a close look at getting rid of duplicate infrastructure, which was needed when GCPL and GHL had different sets of shareholders. A possible reduction in headcount too may be on the cards, said officials.

“We have a phenomenal team led by a completely transformed Adi Godrej. Youngsters in the team and the family have given a completely different dimension to the appetite for growth in the group,” said Mahendran.

The company expects the contribution of the personal wash segment, which is currently the single largest category bringing in 33 per cent of revenue, to go down while hair care and home care’s shares will increase.

“The personal wash category is 100 per cent penetrated in India, so growth is bound to be slower but that is not the case with the GHPL business. A lower share of the personal wash category will help reduce the fluctuation in margins that we see from year to year on account of the raw material intensive nature of the soaps business,” said Adi Godrej, chairman, Godrej Consumer Products.