HLL sells 26% in GFFL to Godrej Agrovet

Our Marketing Bureau

Mumbai, Sept 20: Hindustan Lever Ltd (HLL) has exited the animal feeds business through the sale of its balance 26 per cent stake in Goldmohur Foods & Feeds Ltd (GFFL) to joint venture partner Godrej Agrovet.

HLL had earlier announced its intention to exist the animal feeds business, and in line with this, HLL had transferred its animal feeds business in April 2000, to GFFL, its 100 per cent subsidiary.

Earlier in January this year, Godrej Agrovet had acquired 74 per cent in GFFL. GFFL has now become a wholly-owned subsidiary of Agrovet, which is a leading player in the animal feeds and agricultural inputs market. Lazard India have been the advisors to Godrej Agrovet for this deal.

Commenting on the deal, Godrej Group chairman Adi Godrej said in a press statement: “We have now integrated the operations of this business and the expected synergies of the combined operations, specially in the areas of procurement and R&D are being realised. We expect the two businesses to co-exist and grow the compound feed markets in India.”

In the past few months, effective steps have been taken to arrest falling volumes and GFFL is now on a strong growth path. Operating profit has more than doubled in the period April-August 2001, as compared to the same period last year, the company said.

GFFL, with a turnover of about Rs 290 crore and a market-share of about 12 per cent in the organised sector, is a well-known player in the animal feeds industry. It sells its feeds under the brand “Gold Mohur”, which enjoys a strong goodwill and market support in the poultry and cattle feed markets.

The move has also enabled Godrej Agrovet to get a better geographical spread with GFFL having a strong presence in the western and southern markets. Godrej Agrovet is part of the Rs 4,000 crore Godrej Group, and is a major player in the Indian agricultural sector, with a large presence in the compound animal feeds, integrated poultry, innovative agricultural input and oil palm plantation businesses. With a turnover of Rs 370 crore, the company has 37 manufacturing and processing units.