HUL to reopen factory after 7-week lockout

Hindustan Unilever, India's biggest household-products maker, said it will end a seven-week lockout today at a factory that makes almost a third of its personal-care products after a dispute with workers was resolved.

The decision to reopen the factory was taken after a meeting with workers and the Assistant Labor Commissioner, Mumbai-based Hindustan Unilever said in an e-mailed statement yesterday. The factory is located in Doom Dooma, 500 kilometers (311 miles) from Guwahati, the capital of the northeastern state of Assam.

The factory, one of 40 that Hindustan Unilever operates in India, accounts for about 30 percent of the company's total output of personal-care products. Half the company's pretax profit and a quarter of net sales come from products such as Fair & Lovely skin creams and Pepsodent toothpastes.

"The union has agreed to abide by all the conditions of the settlement signed in April 2004,'' Hindustan Unilever said.

"The management has agreed to pay the Settlement Implementation Allowance to the workmen.'' The company didn't say how much it would pay the workers. In April 2004, the workers and the management agreed on a settlement whereby the workers were to be paid an additional allowance of Rs 200 ($5) a month from April this year, Hindustan Unilever had said in July.

Shares of Hindustan Unilever, 51.4 percent owned by Rotterdam- and London-based Unilever, have gained 3 per cent since the lockout started on July 15, compared with a 0.3 per cent rise in the benchmark Sensitive Index of the BSE.

The Doom Dooma factory started production in 2001 and employs more than 700 people. The factory makes shampoos, oral care products and talcum powder, the company said in an e-mailed response to questions last week.