HLL in joint venture for fragrances business

By Our Special Correspondent

MUMBAI, MARCH 28. Hindustan Lever (HLL), ICI India and Quest International BV today announced their intention to form a joint venture to carry on the fragrances and flavour business of the Quest Division of HLL. The turnover of this business in 2000 was Rs. 95 crores including captive consumption.

Under the proposed joint venture arrangement, ICI India and Quest International BV will together hold 51 per cent stake and the balance 49 per cent will be held by HLL. The joint venture combines ICI India's long standing knowledge of India, HLL's detailed understanding of Indian consumers' preferences coupled with Quest International's consumer understanding, technological and creative expertise.

``The joint venture is expected to become operational in the middle of the year and will buy and own HLL's current operations, covering its activities and associated facilities for this business,'' stated a press release issued here today by HLL. The value for the 51 per cent shareholding in the joint venture is placed approximately at Rs. 155 crores which includes a premium for management control.

The joint venture would however, exclude the aroma chemicals business of HLL and the erstwhile Industrial Perfumes which would be carried on as a division of HLL.

HLL stated that it is extremely pleased with the formation of the joint venture since it was HLL's clear intent to tie up with a technology partner to secure longer term future viability of this business, post global divestment of Unilever's speciality chemicals business in 1997. The proposed tie-up with ICI India and Quest International BV will provide cultural and operational fit for the Quest division of HLL which until 1997 operated as the Indian arm of Quest International's business.

The proposed transaction is subject to the shareholders' approval which is proposed to be secured at the annual general meeting of the company on June 1, 2001.

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