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Fast-Moving Consumer Goods (FMCG) maker Hindustan Unilever Limited (HUL) sold its water purification business Pureit to A.O Smith’s Indian business for Rs.601 crore ($ 72 million).
The company in a stock exchange filing stated that the sale was a strategic move and would be done on a slump sale basis. Pureit water purifier was launched in 2004 in Chennai and was later launched across the country in 2008. The acquisition of Pureit is projected to close by the end of 2024.
Pureit offers Copper RO, Pureit Eco Range, Pureit Ultima RO, Pureit UV purifiers, Classic UV Water Purifier and Marvella UV Water Purifiers.
“This move is in line with our strategic intent to focus sharply on our core categories. Pureit provides essential water purification solutions to millions of loyal consumers, and I am confident the brand will thrive further under the ownership of A. O. Smith,” said Rohit Jawa, CEO & Managing Director of HUL.
Pureit annual turnover in FY2023-24 was Rs.293 crore which is less than 1 per cent of HUL’s turnover. The business of the company is part of the Home Care business.
The Indian water purifier market valued at USD 1,255.04 Million in 2023 is expected to grow at a CAGR of 18.4 per cent and reach USD 5,738.82 Million by 2032.
“We believe the addition of Pureit will strengthen our leadership position as a global supplier of premium water treatment products and will double our market penetration in South Asia. The acquisition will also support our corporate strategy by enhancing our premium product portfolio and distribution capabilities,” said Kevin J. Wheeler, chairman and chief executive officer.
Poor penetrated industry
The industry is facing penetration difficulties across the country due to affordability factors particularly in the hinterland.
“A significant restraint in the Indian water purifier market is the affordability challenges faced by the lower-income segments of the population. High-quality water purifiers with advanced filtration technologies can be relatively expensive, making them inaccessible to a substantial portion of the market. This economic barrier limits the penetration of water purifiers in rural areas and among lower-income urban households, hindering market growth in these segments,” mentions a consumer market insight report.
Experts mention that the government needs to check on the infrastructural differences in the adoption.
“The inadequate infrastructure in rural areas poses a restraint on the water purifier market in India. While urban areas may have better access to electricity and water supply, rural regions often lack consistent power supply and piped water systems. This presents challenges for the effective deployment and usage of electric-powered water purifiers,” adds the report.
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