Godrej Consumer to Close Company´s Factory at Silvassa

Godrej Consumer Products Ltd has announced that the Board of Directors has passed a resolution on August 30, 2006 for the closure of the Company´s factory at Silvassa, subject to the approval of shareholders under Section 293(1)(a) of the Companies Act, 1956 and subject to other regulatory approvals as may be applicable. As required under the Companies Act, 1956, the approval of shareholders is proposed to be obtained by means of postal ballot.

Background

Some of the products in Hair colour category are manufactured at Silvassa factory. The factory at Silvassa is on premises which have been obtained on lease. This factory is prone to flooding every monsoon which affects the manufacturing and distribution activity and also increases the cost of operations. Since the lease of the premises is expiring on December 31, 2006, the Board feels that this is an opportune time to close the manufacturing operations at Silvassa.

No impact of the proposed closure on Company´s operations

The Company has made alternate arrangement for manufacture of these products through Third Party processing units at Baddi, Himachal Pradesh, which would be at a lower cost. Hence, inspite of the closure of the Silvassa factory, there will be no disruption at all in the production, distribution and availability of the concerned products in the market.

Source : Equity Bulls

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