The Hindu Business Line : Dabur decides to exit Dabon — We're in expansion mode, says Dabon CEO

EVEN as Dabur India Ltd (DIL) has decided to exit from joint venture company Dabon International Pvt Ltd, the latter has decided to continue with its expansion plans.

While neither company is willing to divulge details of the imminent deal, the Dabon Chief Executive Officer, Mr Sumeet Anand, told Business Line that the company was in expansion mode.

Earlier today, the DIL board gave in-principle approval for selling off the company's entire 38.5 per cent stake in the loss-making joint venture. DIL had forged the venture with Bongrain of France in 1996 for manufacturing cheese and other milk-based products.

Dabon was launched at a time when DIL was diversifying into several other product segments as well, including confectionery and biscuits. However, once it identified these areas as non-core, DIL exited the confectionery joint venture with Spanish company Agrolimen in 1998 and the biscuits joint venture with Nestle SA (called Excelsia) in 1999. It was, however, in a dilemma over the investment in Dabon till now.

In April, the DIL Group Director, Mr P.D. Narang, had said that cheese and milk products were also a "non-core" business for the company. He had said that DIL had invested Rs 13.5 crore in Dabon since the latter's inception.

When contacted, a DIL spokesperson declined to confirm if Bongrain was acquiring DIL's 38.5 per cent stake in Dabon. Also, no confirmation was available about the size of the deal.

Dabon was launched as a 50:50 JV in 1996. In 2003-04, Bongrain infused another Rs 8 crore in the company, thus diluting DIL's stake to 38.5 per cent, even as DIL continued its freeze on any fresh investments in the company. According to the board's decision, DIL will offload the 1,35,00,000 equity shares of Rs 10 each of Dabon.

Meanwhile, Mr Anand said, "We are in an expansion mode. Besides the cheese portfolio, we entered the paneer market last year. After completing the test launch of paneer in Delhi, we will be taking it to Mumbai next. Also on the anvil is the launch of another new product under a new brand name from the global portfolio of Bongrain," he said.

Dabon will launch `Le Bon Milkana' - cheese spread triangles - aimed at kids next year. On whether the company had withdrawn its Le Bon low-cholesterol ghee, Mr Anand said that the product, also taken from Bongrain's global portfolio, was test marketed in 2003-04 and might be launched in the country in the near future.

Dabur revamps subsidiaries

AS part of a strategic decision on investments and in order to have a better control over its subsidiaries, the Dabur board also approved the transfer of about 80 per cent of its stake in Dabur Nepal Pvt Ltd and the entire shareholding in Dabur Overseas Ltd to Dabur International Ltd.

Dabur International is a wholly owned subsidiary of DIL and houses the latter's international businesses. After today's decision, 6,38,520 equity shares of Nepalese Rs 100 each in Dabur Nepal and 50,000 equity shares of $10 each in Dabur Overseas will be transferred to Dabur International.

On completion of these share transfers, Dabur Nepal and Dabur Overseas will become step-down subsidiaries of DIL.

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