Gillette Plans $20 Million Voluntary Grant In Indian Arm

The Gillette Company, US-based manufacturer of male and female grooming products and alkaline batteries (Duracell), is pumping in an additional $20 million in its Indian arm, Gillette India Ltd, by way of a voluntary capital grant.

The capital grant is not towards capital contribution by the parent and will not carry interest. It will not be a part of the equity or debt component that has been invested in the company so far.

A Gillette India spokesperson said that the parent has opted to make this investment keeping in view the long-term financial position of the Indian business and to help meet its long-term commitments.

 

"The decision on the capital grant infusion had been taken when Gillette planned to close down its Duracell battery manufacturing unit in the country. Today's announcement is further to our commitment made to our stakeholders," the spokesperson said.

The company's bottomline is under pressure over the past one year and the Duracell alkaline battery business, which was closed down in January, has bled it enough. In the nine-month ended September 30, 2001, Gillette India reported a marginal profit on Rs 353.97 crore turnover. In the previous year ended December 31, 2000, the company had registered a profit of Rs 26.42 crore on a turnover of Rs 536.54 crore.

The equity capital of the company is Rs 32.59 crore, in which The Gillette Co directly holds 45 per cent. But the group's total stake in the subsidiary is 75 per cent, which includes a 30 per cent stake owned through a 100 per cent investment vehicle, Gillette Group India. The balance shareholding is held by the public.

Earlier on January 28, when Gillette India announced the acceptance of voluntary retirement scheme by all employees of the Duracell unit, its decision to cease production at the Manesar plant and import alkaline batteries from Duracell units worldwide, it had said that it would infuse funds voluntarily into Gillette India by way of capital grant.

Headquartered in Boston, The Gillette Company is one of the leading manufacturers of male grooming products, a category that includes blades, razors and shaving preparations. Gillette also holds the number one position worldwide in selected female grooming products, such as wet shaving products and hair epilation devices. In addition, the company is leading manufacturer of alkaline batteries and manual and power toothbrushes.