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June 13, 2001
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Money > Business Headlines > Report June 13, 2001 |
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HLL cuts stake in Snowman FoodsReeba Zachariah Fast-moving consumer products company Hindustan Lever has reduced its holding in Snowman Frozen Foods, the nationwide cold storage chain set up by the company along with a Mitsubishi-led consortium, to 10 per cent. The company has not used its full entitlement in a recent rights issue of the cold storage company, following which its stake has dropped from the earlier 15 per cent. HLL officials said: "Eventually we will only use the cold storage company's facilities for our ice cream business. Hence, we decided that only a token stake was sufficient and need not have a bigger share as we had planned earlier." Snowman Frozen Foods currently has an equity base of Rs 502 crore, in which HLL holds around 3.8 million shares. In 1999, the company had an equity base of Rs 158 million, with HLL's invested at Rs 24 million. HLL has been reworking its strategy on the ice cream business, which has not been faring well over the previous quarters. For fiscal 2000, HLL's ice cream division recorded flat sales due to product rationalisation. HLL had launched Softies ice cream to build market and increase consumption. According to analysts, the ice cream market in India is worth Rs 10 billion per annum, of which the organised sector comes to around Rs 6 billion. HLL claims that it has a market share of 60 per cent followed by its competitor Amul. The per capita ice cream consumption in the country is abysmally low at 250 ml per year compared with 22 litre in the US. The company is aiming to double its turnover to Rs 4 billion from the ice cream business in three years. HLL is planning to set up a chain of ice cream parlours, which will grow to 25 from two now. The company expects these parlours to contribute significantly to the division's turnover in three years. Powered by YOU MAY ALSO WANT TO READ:
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