HLL plans to merge Toc Disinfectants with itself

Merger to bring Domex into the FMCG major's fold

Hindustan Lever Ltd (HLL), the fast moving consumer goods major, is planning to merge Toc Disinfectants with itself after making it a wholly owned subsidiary by buying out joint venture partner S C Johnson.

Toc Disinfectants owns the Domex floor cleaner brand and is one of the core brands of HLL.

The merger would bring Domex directly into the HLL fold. The brand is a part of Hindustan Lever's home and personal care business, the company's biggest growth driver. Last quarter this business grew by 3.5 per cent.

M K Sharma, vice chairman, Hindustan Lever said, " It is a question of when rather than whether."

Toc Disinfectants is a joint venture between HLL and SC Johnson. The company was formed a few years back when by splitting the joint venture Lever-Johnson into two.

One company, Toc Disinfectants would focus on the disinfectant business while the other would focus on insect control and air care.

Under the terms of the understanding between the two sides, Hindustan Lever would eventually control the disinfectant business while S C Johnson would assume total charge of the insect control and air care.

The US based SC Johnson & Son and HLL had formed a 50:50 joint venture in 1995 with an initial capital of Rs 15 crore to cater to the Indian market.

HLL brought to the table its expertise in disinfectants while SC Johnsons' contribution was its expertise in insect control products and air care.

The joint venture was also to benefit from HLL's strong distribution presence in the domestic market. The joint venture, however, slid into the red.

The joint venture had put up manufacturing facilities and a technical centre at Sanaswadi near Pune for the manufacture of mosquito mats and disinfectant cleaners. A new manufacturing facility for disinfectant cleaners was also added at Daman in 2002.