Lever to sell polymer business, transfer soap unit

Consumer goods company Hindustan Lever Ltd (HLL) is selling its interests in the functionalised biopolymers business and is transferring its soap manufacturing facility at Mumbai to a subsidiary.

HLL today informed the Bombay Stock Exchange that it is seeking shareholder approval for two separate proposals ""- the transfer of its soap and soap intermediate manufacturing facility at Sewri, Mumbai, to a subsidiary and the sale of its functionlised biopolymers (a speciality chemical intermediate) business, including the manufacturing facility at Pondicherry.

The Mumbai soap plant has a capacity to produce 38,000 tonne of soap and employs around 1,170 people. The biopolymer business is a sub-unit of its speciality chemicals business and has been identified as a non-core area.

The Pondicherry unit has around 20 employees. In 2003, the bio-polymer business recorded sales of Rs 19 crore.

The company's decision to demerge the soap unit to a subsidiary is prompted by the high manufacturing costs that are getting reflected on its books.

HLL joins a list of companies and business groups like Britannia Industries and the Godrej group that have been restructuring their manufacturing plants and moving to low-cost manufacturing centres like Himachal Pradesh and Uttaranchal.

HLL used to source technology for its speciality chemicals business from its Anglo-Dutch parent. It can't do so anymore as Unilever has exited the business.

In India, the company has been hiving off its speciality chemicals business into separate product segments and selling these individually to third parties.