Godrej Consumer Products (GCPL) & SCA Hygiene Products AB, Sweden form 50:50 JV

Godrej Consumer Products Ltd (GCPL) has announced that SCA Hygiene Products AB, Sweden, (SCA) a 100% subsidiary of the SCA Group, and the Company on March 24, 2007 have signed an agreement to forms Joint Venture Company which will manufacture and market paper based absorbent hygiene products, specifically sanitary napkins and baby diapers, in India, Nepal and Bhutan SCA and the Company will be equal partners in the Joint Venture incorporated as "Godrej SCA Hygiene Ltd". Mr. A B Godrej, Chairman Godrej group of Companies will be the Chairman of the new entity which is being set up with an equity capital of Rs 200 million through equal investments by both parents.

SCA is a global consumer goods and paper Company that develops, produces and markets personal care products, tissue, packaging solutions, publication papers and solid-wood products. The Group conducts sales in some 90 countries and with its TENA brand is the world’s leading provider of absorbent incontinence products, holding a global market share of 26 per cent. Its strong, market-leading brands for baby diapers include Libero and Up&Go and for feminine hygiene products Libresse, Nana, Bodyform and Nuvenia. SCA will bring to the Joint Venture its world leading technology and brands for the Indian market.

The range of products to be marketed by Godrej SCA Hygiene will be distributed across the Company's well established distribution network spread across the country comprising over 2.5 million retail outlets. The Company's 'Snuggy' brand will be sold to the Joint venture Company.

Commenting on the setting up of Godrej SCA Hygiene, Mr. A B Godrej, Chairman said, "We believe there is opportunity in the feminine hygiene protection and baby diaper market, which is presently in a nascent stage in the South Asian Subcontinent region. Godrej SCA Hygiene enjoys a wealth of experience in the business, besides possessing a portfolio of strong brands and a well developed distribution network, all necessary ingredients that should enable us to swiftly create a presence in India and neighbouring regions".

The Joint Venture Company proposes to set up manufacturing operations in India and focus on establishing its presence in feminine hygiene protection and baby diapers, both of which are among the fastest growing categories in the FMCG segment. The feminine hygiene protection category is estimated at Rs 8 billion while the baby diapers business is presently estimated to be Rs 2 billion in size.

Source : Equity Bulls

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