Dabur India on Wednesday approved a proposal to completely acquire Britain-based Redrock Ltd at an investment of about $5 million.

Redrock Ltd is engaged in manufacturing and selling, including export, of various cosmetics and toiletries and healthcare products.

The proposal is subject to the requisite approvals of regulatory authorities, the company said in a notification to the stock exchange.

Redrock is currently a franchisee of Dabur in the Middle East. It entered into a licensing agreement with Dabur India in 1991 and has since then produced and marketed Dabur brands.

It manufactures Dabur products at its production plant in the Jebel Ali Free Zone. The company's operations cover the Middle East, Pakistan and Africa.

Redrock enjoys a market leadership in the hair oil business across the Gulf with Dabur Amla Hair Oil, the largest hair oil brand in the Middle East.

Redrock Ltd also holds major beneficial stake in Weikfield International (UAE) LLC, a company registered in Sharjah, engaged in manufacture and sale of cosmetics and toiletries and food products catering essentially to GCC countries.

The board has authorised select officials of the company to negotiate and finalise the deal.

In a recent reorganisation of middle east exports, Dabur had already transferred its middle east exports to Redrock.

Dabur has recently announced its intention to increase focus on exports from the current share of about 8 per cent.

"The company expects this business to grow steadily in the coming years and this acquisition would play a pivotal role in achieving that objective," a company official added.

Exports of Dabur, excluding the middle east market, increased by 60.7 per cent from Rs 15 crore (Rs 150 million) in 2001-02 to Rs 24.1 crore (Rs 241 million) in 2002-03.

The company has already created an international business division, based in Dubai, to promote exports.

Net up 36% in Q1

Dabur India Ltd has registered a 36 per cent growth in its net profit at Rs 16 crore (Rs 160 million) in April-June 2003 compared with Rs 11.5 crore (Rs 115 million) in the corresponding period last year.

The turnover of the company increased by 13 per cent from Rs 266 crore (Rs 2.66 billion) in the first quarter of 2002-03 to Rs 300 crore (Rs 3 billion) in the same quarter this year.

The company added that the first quarter results should not be annualised as sales usually improve in subsequent quarters.

While the net profit for the fast moving consumer goods company comprising personal care, health care and ayurvedic specialities products grew by 54 per cent, up from Rs 7 crore (Rs 70 million) to Rs 11 crore (Rs 110 million) during the period under review, the turnover increased by 12 per cent from Rs 222 crore (Rs 2.22 billion) to Rs 247.50 crore (Rs 2.475 billion).

Hair care, oral care and child care segments were the key drivers of growth.