Sunil Duggal:Let us take shampoos. Shampoos what will be the split.<strong>Dabur</strong> <strong>India</strong> <strong>Limited</strong> Q2/H1Earnings Conference CallOctober 31 st , 2008Saibal Sengupta:The overall shampoo volume value is almost similar.Sunil Duggal:The reason is obvious that it is Re.1 sachet configurations which drives volume growth..Sengupta: Overall in the hair oil portfolio, I think the split as I said earlier is around 40and 60, 40 % is for price and 60% is the volume.Sunil Duggal:This is the hair oil portfolio. As we mentioned, shampoos has witnessed almost no priceincrease.Hozefa Topiwalla:No price increases. 70% is sachet.Sunil Duggal:75% is sachet and continues at Re.1.Hozefa Topiwalla:I don’t know whether you have this right now, if there is any input cost index what will bethe YOY increase in index for you all this quarter compared to the possible quarter in theprevious year approximately.Sunil Duggal: 6%.Hozefa Topiwalla:There is only 6% increase.Sunil Duggal:In terms of raw and packing, material cost.Hozefa Topiwalla:If you look at the first month in this quarter has there been any fall already, I know it is tooearly to say that but………Sunil Duggal:I think the fall will really happen from November. October is probably residual carryforward increase. What we are doing is we are buying at a much lower rate in October thanwe did in previous months but the consumption is actually of the higher price product. Ithink going by our inventories the older price products would be largely exhausted by endof this month or may be early November so then we will be consuming the lower pricestock which would reflect in higher gross margins, the mix remaining the same obviously.Hozefa Topiwalla:Just to get a better understanding on this input cost which commodities have you witnessedthe maximum inflation on a YOY basis this quarter.Sunil Duggal:First commodity was LLP -light liquid parafine, which is again a petroleum derivative.Coconut oil was the second. Honey was big, t some oils, not all but mustard oil was a bigone, so these are the big areas where we had inflation.
Hozefa Topiwalla:<strong>Dabur</strong> <strong>India</strong> <strong>Limited</strong> Q2/H1Earnings Conference CallOctober 31 st , 2008Since your input cost index will be up only 6% YOY which means that you have actuallywitnessed deflation and few other input costs. Which category actually witnessed deflationapart from sugar?Sunil Duggal:Things like lami-tubes, we paid lower price, sleeves we paid lower price, cardboard boxers,lot of paper stuffs were lower, cardboard boxes, cartons.Hozefa Topiwalla:Okay these are the ones right. Okay, on your international business, the volatility in thegrowth rates has been quite high in the past. From our business planning perspective tomanage this kind of volatility in growth how do you really plan this growth out and howshould we look at this growth and how should we focus growth and how predictable is thegrowth in these markets.Sunil Duggal:How predictable, that is a good question. It is less predictable than the growth in thedomestic business because we are looking at far-flung geographies, we are looking atfeeding markets sometimes, things work very well sometimes they don’t, but what we havedone in terms of managing the whole supply side is to setup a very large manufacturingplant now fully commissioned in UAE. That is something, which would service us at leastfor the next couple of years without any major expansion. We do have supply issues ofserious nature in Egypt where the growth has been well ahead of our estimates butfortunately most of the markets we have been able to manage we put in the capacities at theright time just when the business was beginning to peak, but there is unpredictability andtherefore we always tend to be a little conservative in our forecasting and I certainly wouldnot forecast 55% growth in MENA for the next year even though we will strive for it.Hozefa Topiwalla:How do you manage the growth when it actually comes to you?Sunil Duggal:How do we manage, because our plants are scalable in terms of manufacturing? We do putin much higher capacities than what current demand is. Typically, if the current demand is60, we put in capacities of 100, because it does not cost you a lot of money to put in extralines in terms of manufacturing or particularly in terms of packaging, we have CapEx lightbusinesses and we are quite happy to run factories at 50% to 60% capacity utilizationbecause we need a lot of stock to meet unforeseen demand.Hozefa Topiwalla:Sir, if we look at two geographies. One is MENA and Bangladesh where you have beenpresent for a reasonable amount of time now and there has been very strong growth thisquarter.Sunil Duggal:In MENA yes, in Bangladesh, but then you know MENA growth has been on top of earlierhigh growth. Bangladesh has been on a much lower base. Last 2-3years we probably didnot grow at all there . So we have enough capacity in Bangladesh, but MENA capacity, theRAK plant, which we commissioned in March this year was quite frankly timed to