New Delhi, Aug 20: The Calcutta based B M Khaitan group has sold off the export division of its trading company Macneill International to the $1.5 billion Hong Kong-based company Li & Fung Ltd.

The exact price at which the deal was finalised is not known.

Deepak Khaitan, managing director of Williamson Magor & Co Ltd, the Khaitan group's flagship, confirmed to The Financial Express that the export division of Macneill International has been sold to Li & Fung's Indian subsidiary, Li & Fung (India) Pvt Ltd.

"We have sold the export division including the contacts, agencies and the manpower. Due to certain constraints, the business could not grow in the past few years", he said.

"Our biggest priority was to see the business grow. With the business in good hands, it is expected to grow", he added.

Sale of the export division of Macneill International is part of a corporate restructuring exercise that the group is undertaking. The company plans to retain businesses in areas of its core competency, including tea, batteries and some engineering products.

Li & Fung Ltd's group managing director William Fung said that since Macneill was in the same line of business as Li & Fung, it was felt that the acquisition would give the company added strength in India. "In areas like home furnishings, Macneill's expertise will provide quick familiarity to the business", he added.

Both the companies have been negotiating for the deal since early this year, said Fung. "Our plans in the years to come are that the Indian operations should account for at least 10 per cent of our total global business", he added.

"However, in the short run, our goal is to raise the Indian business to about $ 200 million annually in a few years", he said.

Li & Fung India has a present turnover of about $ 60 million. The company expects the acquired division to contribute about $ 6-7 million annually to its sales.

The trading activities of Li & Fung comprise soft goods which is essentially textiles and hard goods including toys, fashion accessories, festive items, furnishing, handicrafts, home-ware, travel and sporting goods.

In 1995, the company bought Inchcape Buying Service globally and the brand name Dodwell from the British trading conglomerate Inchcape Pacific. Li & Fung got a foothold in India through Inchcape's Indian operations and set up a 100 per cent subsidiary, Li & Fung (India) Pvt Ltd.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.