In line with its core objective of sticking to its products business, Godrej Industries today said it had exited the pesticide services business by selling HiCare to Denmark-based ISS, a facility services company. It held 80 per cent of Godrej HiCare, which will become a wholly-owned subsidiary of ISS.
The proceeds from the sale will go to Godrej Industries and A Mahendran, director, Godrej HiCare (who held 20 per cent the company).
Godrej Industries had diversified into the pesticides business four-five years ago. Mahendran, also managing director of Godrej Sara Lee, a consumer products company which has 33 per cent share of the household insecticides market with products like GoodKnight and Hit, told Business Standard: “We realised it did not make sense to be present in both services and products side of the business. We thought it’s better to be focused on our core competency of product business.”
On Godrej Sara Lee, a joint venture with Godrej holding 49 per cent equity and US-based Sara Lee the rest, Mahendran said the plan was to expand globally into markets where Sara Lee was not present. The insecticides business is just a $430-450 million business for Sara lee globally, with 50 per cent of these revenues coming from India. “We see a huge potential in expanding the insecticides business globally and creating the success that we have had here,” said Mahendran. He, however, did not comment on the company’s reported interest in buying out its joint venture partner, Sara Lee. “We have been requested by the parent company (Sara Lee) not to talk on any development regarding Sara Lee,” he said.
Earlier, the company had hived off its urban gourmet retailing venture, Nature’s Bounty, formerly a part of Godrej Agrovet, into a separate subsidiary, stating it would explore options to partner with global gourmet retailers. Likewise, for Godrej HiCare, the company was looking for a strategic partner to take it to its next level of growth. “However, in our talks with ISS, the company wanted 100 per cent stake and we agreed to opt out,” said Mahendran.
Over the past year, both GCPL and Godrej Sara Lee have increased the pace of their new launches. For instance, Godrej Sara Lee launched five new products in 2008 compared with its past average of three yearly launches.