After buying out the entire stake, for around Rs 150 crore, from its foreign partner on the condom manufacturing and distribution business, TTK Health Care today launched its own brand 'Skore'. The company also said that it is ceasing the distribution of Kohinoor and Durex branded condoms, rights of which will be with Reckitt India. TTK said that it will focus on creating and distributing branded condoms manufactured by TTK-LIG Ltd.
TTK Group has agreed to buy out the entire interest of its foreign collaborator in TTK-LIG Ltd, a joint venture which had the license to manufacture Kohinoor and Durex condoms and these brands have been distributed by the company for the last several years. As a result of the termination of the joint venture, the company will immediately cease distributing Kohinoor and Durex branded condoms.
"We have started the brand building exercise almost six months back and have launched our own brand today. We have an experience of 65 years in this business and have confidence in winning the market," said T T Jagannathan, chairman of TTK Healthcare Ltd told Business Standard. He added the brand building exercise would continue for five years.
While the sources said that the buyout stake from the foreign partner would be around Rs 150 crore, Jagannathan refused to divulge the price for buying out the 49.87% stake of the foreign partner, New Bridge Holdings Ltd, which is part of Reckitt Benckiser, in TTK-LIG.
He added, the company will now focus on creating and distributing branded condoms manufactured by TTK-LIG Ltd. While there may be a transient impact at contribution levels due to cessation of distribution of Kohinoor and Durex, the same is expected to be made up over a period of time by new branded condoms as well as growth sectors like foods and other consumer products.
It may be noted, earlier Business Standard reported that both the parties have agreed that New Bridge Holdings would sell its 49% share in TTK-LIG to TTK Group, while TTK-LIG would sell its 49% stake in SSL-TTK, the manufacturer of Scholl footware and footcare brand, to Reckitt Benckiser Group.
While the agreement regarding the settlement was signed in the end of September, 2012, the actual transfer happened today, including the transfer of money and the other formalities, said sources close to the development. As part of the settlement, TTK-LIG would sell its 49% stake in SSL-TTK, the manufacturer of Scholl footware and footcare brand, to Reckitt Benckiser Group for around Rs 12 crore. This transaction has to wait for approval from the Foreign Investment Promotion Board.
The agreement signed in September included New Bridge Holdings buying all the stocks with the trademarks of Reckitt Benckiser, inlcuding Durex, Kohinoor, Fiesta, and what is in the pipeline, with the Trademarks of Reckitt Benckiser (Durex, Kohinoor, Fiesta etc.), from TTK-LIG after inspection and approval.
TTK-LIG will henceforth be almost fully owned by TTK, which from today will stop sale of Durex and Kohinoor brands, whose rights in India would rest with Reckitt India.