HLL to sell starch, leather businesses

Hindustan Lever has decided to put its starch and leather businesses on the block.

While revenue from the starch business was around Rs 15 crore, revenue from the leather business was around Rs 80 crore.

While the leather business was transferred to a subsidiary in April 2002, the starch business is owned by HLL itself.

S.P. Mustafa, group treasurer & head - M&A & investor relations at HLL told Business Standard, "In line with our policy of exiting non-core areas, we have been on the lookout for buyers for our leather and starch businesses."

The leather business has manufacturing units at Mettupalayam in Pondicherry and makes shoe uppers. The business has been facing pressure since 2002 due to the loss of key European customers who have closed down shoe factories. Further, they are now sourcing from China.

Last year HLL disposed off its vanaspati brand - Dalda.

The company has chalked out a strategy of focusing on power brands over the last few years and has been steadily exiting non-core areas. It has also quit the seeds and animal feeds businesses.

Mustafa said the company would be open to acquisitions. "We are open to acquisitions in foods and allied categories of the home and personal care business. However, at the moment, nothing has been finalised," he added.

Hindustan Lever is also open to merging some subsidiaries with itself, he said.

The company's exports to its parent - Unilever - increased 14 per cent in the year ended December 31, 2003.