Wipro buys lease rights of Chandrika soap

Wipro has announced that it has entered into a definitive agreement with SV Products to acquire the long-term lease rights of the soap brand "Chandrika" for use in India and SAARC nations.

This is Wipro's second such acquisition under its consumer care division after Glucovita early this year.

However, Wipro has neither disclosed the total sum paid as royalty to SV Products nor specified the actual term for which this lease agreement would last.

The deal also concludes the long drawn battle between SV Products, Marico and Wipro to own and market the Chandrika brand.

As part of the settlement, Marico has been paid in cash in an out-of-court battle. Once again, both officials

from Wipro as well as S.V. Products has not disclose the terms of settlement with Marico, siting contractual obligations.

The Chandrika family partnership will retain export rights to the brand in other countries and will also continue to manufacture Chandrika soaps for Wipro.

Wipro has also said that it will enter into a separate manufacturing agreement with the Chandrika family partnership for the manufacture of the soap.

The transaction is currently anticipated to close by March 31, 2004.

According to Vineet Agrawal, president of the Wipro Consumer Care and Lighting division, "The acquisition of Chandrika brand will definitely have a substantial impact on our topline. It is a good heritage brand and has the potential to grow. We intend to combine our existing distribution strengths with the strong Chandrika brand to consolidate our presence in core states in India and expand into new markets."

Prior to this agreement, Wipro had signed for distribution rights of Chandrika with SV Products in Tamil Nadu, Andhra Pradesh and Maharashtra in June 2003.

Chandrika's annual sales during the last fiscal was Rs 28 crore and this includes Rs 4 crore in exports. SV Products had spent about Rs 2 crore on marketing this brand.

As it would take more time to actually close the transaction, Wipro is yet to finalised its marketing plan for Chandrika.

Sidha shampoo, another product from the SV Products stable is one other commodity, is likely to be taken over by Wipro.