KARACHI, Sept 6: Gillette Pakistan Limited (GPL) has reduced its sales staff strength to 35 persons from 65 during the last one year owing to continuous erosion of market share and losses in sales of toiletry products.
The GPL toiletries have now become uncompetitive as the market is flooded with the smuggled goods which are cheaper by around 30 per cent as compared to the company’s product.
Gillette has been demanding of the government for the last one year to reduce 10 per cent CED on toiletries as these products combined with 15 per cent sales tax and 25 per cent customs duty on imports have created a big room for the smuggled products, thus preventing legal import business from developing. However, all the representation and meetings with the government had so far proved futile.
“If this situation persists, we will not be able to sustain our business in future,” GPL country manager M. Azhar Aqil told Dawn on Friday.
“We have already lost 30 to 40 per cent market share in our toiletries business during the last one-and-a-half years. Both sales and market share are continuously declining even these days,” he said.
GPL, which used to spend around two million dollars on advertising few years back, had already cut down it from second half of the last year. “We have suspended our advertising campaign this year,” he added.
The company’s toiletry products business got a jolt from the last budget when the basis of excise duty was changed from 10 per cent ad valorem to 10 per cent of retail price.
In the first six months (January-June 2002), GPL sales stood at Rs322 million, showing a fall of six per cent, as compared to Rs344 million in the same period of 2001. The half-yearly report said that sales had declined because of economic slowdown after the September 11 incidents followed by continued tension at the borders, besides significant increase in illegal imports in personal cares, blades and razors segments.
GPL has urged the government to change the basis of CED to ad valorem so that it could help in reclaiming the lost market share, besides increasing the revenue to the exchequer.
Gillette had already closed down its factory at Hub, Balochistan, in 1999 as part of its global restructuring plan. The factory, set up in 1987, was producing 7’O Clock blades and Gillette Blue II razors. These products could not compete with the cheap Indian products in the market at that time.
