Henkel shareholders approve recasting

Written by Sajan C Kumar | Chennai | Updated: Oct 17 2009, 05:39am hrs
The shareholders of Henkel India Ltd, a subsidiary of Germany's Henkel AG&Co, have given their consent for restructuring of the company's operations. The board of directors had cleared restructuring in a meeting on September 11 and sought the shareholders' nod. The Chennai-headquartered FMCG major, with flagship brands Henko, Margo and Pril, is planning to move out of manufacturing cosmetics products and source the requirement from accredited third-party manufacturers. The company is learnt to have initiated discussions with major contract manufacturers of soaps and cosmetics. The cosmetic business contributes close to 30% to the annual turnover of the company.

As a first step towards withdrawing from cosmetic manufacturing, the company has put on block its cosmetic manufacturing facility, comprising land and plant machinery and other movable assets, at Tiljala in Kolkata. Though the company in its communication to its shareholders said the move is in alignment with the needs of its current and future business, industry experts feel it might be in conjugation with its global parent company's business strategy.

Even though the company will end production, branding and marketing will still be done by Henkel, said a source.