The Hindu Business Line : HLL to exit marine products business

Scheme of things
Proposal is to sell the assets as a slump sale to a suitable party or parties or to one or more of the subsidiaries of the company.
Exit move not a surprise as HLL has already sold its seafood processing plant in Andhra Pradesh.

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Mumbai/Kochi Feb. 20 Hindustan Lever Ltd has decided to sell its marine products business. This is on the lines of the company's strategy to exit non-FMCG business, said a company official.

The marine products business is valued at about Rs 200 crore, the official said.

According to a notice to the stock exchange, the board of directors of the company at its meeting on Tuesday decided to sell the marine products business which includes: manufacturing facilities for Surimi crabsticks, crabclaws, crab chunks and allied products at Chorwad in Gujarat, fish fillet, crab, octopus, squids and allied products at Kuthiathode in Kerala and salad shrimps, fish fillets and allied products at Aroor in Kerala.

The proposal is to sell these assets as a slump sale to a suitable party or parties or to one or more of the subsidiaries of the company.

The company will be seeking shareholders' approval through postal ballot, the result of which will be announced on March 31.

The exit of HLL from seafood business is not expected to rock the Indian seafood industry or the country's marine export market. HLL was among the biggest seafood exporter from the country, followed by Castle Rock from Mumbai, Falcon Marine in Orissa and Devi Seafoods in Andhra Pradesh.

However, the exit-move from the seafood company has not come as a surprise to the industry, since HLL had already sold its seafood processing plant in Andhra Pradesh and shut down its operations in Gujarat.

The only effective operational unit remaining is in Kochi, seafood industry sources said. The seafood industry continues to be burdened by over-capacity, while paucity of raw materials is another persistent problem. However, the latest processing and packaging units of HLL were a cut above the rest.

Industry's burdens

HLL, which was mainly a merchant exporter in the seafood market, became an active player after it took over the seafood processing plants of the Kochi-based Amalgam group.

Though multinationals proliferate in the international seafood industry, they are pronounced by their absence in the Indian markets. In a market with huge built-in over-capacity and severe raw material shortage, you need to be nimble and fleet-footed to keep pace with the developments in the domestic market, industry sources said. However, given the company's huge international reach, HLL was the top seafood exporter from the country with a significant presence in Europe.

But, Europe itself has become the major destination for the Indian seafood industry, after economic slowdown throttled Indian seafood exports to Japan and anti-dumping duties were enforced for Indian shrimp exports to the US.

While there will be a role for major players like HLL in the seafood export market either as merchant exporter or producer-exporter, industry sources said that the exit is not expected to create a void in the market.

More Stories on : Personal Products | Restructuring | Aquaculture | Hindustan Lever Ltd

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