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Hind Lever in venture with India Seeds

BS Corporate Bureau

Consumer goods giant Hindustan Lever Ltd has entered into a joint venture with India Seeds Holdings, a company incorporated in Mauritius engaged in the seed and biotechnology industry for its seeds business.

HLL had hived off the seeds business into a separate company - Paras Extra Growth Seeds with an objective to induct a suitable technology partner into the business who could add value through technology, know-how, marketing and product development. The capital base of Paras Extra Growth Seeds is being expanded for the purpose.

The joint venture decision is in keeping with HLL's strategy to secure the future of its seeds business, the company said in a press release.

The seeds business undertaking of HLL which had a turnover of approximately Rs 1 billion will stand transferred with effect from March 30, 2002, on a 'going concern' basis to Paras Extra Growth Seeds for a consideration of Rs 1.15 billion and is likely to lead to profit before tax of Rs 720 million for HLL.

The capital base of PEGSL has been expanded to finance this acquisition and in order to retain 26 per cent shareholding in the expanded capital base, HLL has made further investment of Rs 71.9 million in the equity capital of PEGSL.

India Seeds Holdings is an associate of the US-based Hicks Muse Tate Inc and Emergent Genetics Llc which has global interests in seeds and biotechnology.

Emergent Genetics Llc has extensive experience in the industry and have access to new seed traits through biotechnology and the operational expertise needed for their introduction and growth in new markets.

The know-how and expertise from Emergent and its associates will complement HLL's seeds business strengths in operations, marketing and distribution thereby adding significant value to the business.

The existing strong franchise in cotton seeds will be considerably strengthened through access to biotechnology-based seeds traits of Emergent, with the recent approval of Bt Cotton Seeds by the Government of India.

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