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Hindustan Unilever to sell stake in Huggies, Kotex JV to partner Kimberly-Clark

18 July, 2016

Hindustan Unilever (HUL) will divest its stake in Kimberly-Clark Lever (KCL) to its joint venture partner US-based Kimberly Clark to focus on its core business, the company said in a stock exchange filing.

The joint venture KCL, set up in 1995, was selling baby- and child-care and feminine-care products under the brands Huggies and Kotex.

Over the next few months, KCL and HUL will define the terms and the future operating model of the business , the firm said. KCL will continue to run the business in India.

In its FY2015-16 annual report, HUL said it faced a tough competitive environment on pricing and trade spends in this segment. 

The shift from diapers to pants affected revenue growth and the competition in the infant-care category was intense, the company said in its annual report.

HUL invested around Rs 15 crore in FY2015-16 in this joint venture to increase production capacity and as on March 2016, it had made an investment of around Rs 50.8 crore KCL.

In FY2013-14, the joint venture reported an income of Rs 316.7 crore with a loss of Rs 50 crore, according to data from VCCEdge, the research data platform of News Corp VCCircle.

Brands in the feminine-care category include Procter & Gamble’s Whisper, Johnson & Johnson’s Stay Free and Emami’s She Comfort.

Emami acquired She Comfort from Royal Hygiene in 2014 for Rs 30 crore.   

More recently, in June 2016, Six Sense Ventures invested in Sooth Healthcare that sells Paree sanitary napkins for Rs 10 crore.

Key brands in the diaper segment include Procter & Gamble’s Pampers and Unicharm’s Mamy Poko Pants. In September 2013, Swedish company SCA Hygiene entered the Indian market with its brand Libero.

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Hindustan Unilever to sell stake in Huggies, Kotex JV to partner Kimberly-Clark

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