HLL to up production in east

Region's contribution to company's topline to rise 39%.

Hindustan Lever (HLL) is planning to scale up production across its facilities in the eastern region to make it a sourcing base for the south-east Asian region.

The company expects the eastern region to contribute Rs 2,500 crore to its topline from approximately Rs 1,800 crore now, in three years.

HLL Vice-Chairman M K Sharma said as the scale of production at the company's facilities in the eastern region is not up to global standards, it is looking at ambitious expansion.

"We are planning to scale up production in all our facilities in the region. The current level of production is not enough to compete in the global market," he said.

At present, the FMCG major has two production facilities in West Bengal and one in Assam. According to Sharma, the eastern region is going to be a major focus area in the scheme of things for HLL in the future. Sharma had met West Bengal Chief Minister Buddhadeb Bhattacharjee in July to discuss HLL's expansion plans in the state.

The production level at the Haldia facility is around 40,000 tonne a year, while it is around 50,000 tonne in Garden Reach and 25,000 tonne in the personal care products facility at Doomdooma.

In comparison HLL's production of personal products in 2005 was to the tune of 40, 70,145 tonne."We are now increasing production in these facilities," Sharma said.

Besides the lower scale of production, the VC said, the high tax levies in India were also coming in the way of the country becoming a sourcing hub.

"The level of tax in personal care products in India is around 30 per cent, if both excise and value-added tax are taken into account. In contrast, tax in China is only 14 per cent. So, it is a huge gap," Sharma said.