The Hindu Business Line : P&G Hygiene to hive off detergent facility in M.P.

PROCTER & Gamble Hygiene and Health Care Ltd (PGHHL) today announced that it was considering hiving off its detergent manufacturing facility in Madhya Pradesh.

In a notice to the Bombay Stock Exchange, the listed entity of the Procter and Gamble group said its board of directors was slated to meet on July 11 to consider transfer, by way of sale or otherwise, of its detergent manufacturing business comprising land, building, plant & machinery and other assets at Mandideep in Raisen district of the State.

No further information was available from the company.

However, industry representatives and equity analysts tracking the fast-moving consumer goods sector say that PGHHL is likely to transfer the facility to the unlisted P&G Home Products Ltd, an FMCG company which has launched brands such as Ariel, Tide, Pantene, Rejoice and Pampers in India. P&G Home is a 100 per cent subsidiary of Procter and Gamble Company, USA.

"It is unlikely P&G would sell out its detergent manufacturing, especially at a time when the group is considering expanding its basket of offerings, particularly detergents. It is more likely a transfer from the listed entity to the unlisted entity," said a senior analyst. The company has set up a manufacturing facility at Baddi, Himachal Pradesh.

PGHHL, the listed entity, was running the manufacturing facility at Mandideep in Madhya Pradesh and earning commission from the associate company. PGHHL is into female hygiene and health care productshad reported a net profit of Rs 86.25 crore for the nine-month period ending March 2005, against Rs 79.50 crore in the year-ago period. PGHHL has a facility in Goa for manufacturing the Whisper brand of products.

Irrespective of who the buyer is the decision to sell the manufacturing facility could augur well for the investors of the listed company. One theory is that the company could use the funds from the sale to launch its toothpaste brand Crest in India. "The company has been contemplating the launch of Crest for a while now," said another analyst.

Shares of PGHHL moved up to Rs 650 from Rs 647.20 on the BSE.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
P&G Hygiene to hive off detergent facility in M.P.

British Airways, Air Sahara sign MoU to enhance cooperation

Direct tax collections up 32 pc in Q1: CBDT chief

Nicholas to pick 17 pc stake in Canadian biotech firm

London blasts rock markets — Sensex down 142 points, Re hits 3-week low

A repeat of Madrid in London

Videocon group buys out Electrolux Kelvinator India

HDFC Bank plans to set up NBFC