Hindustan Unilever Limited (HUL) has announced that it has signed an agreement for the sale of its Rice Exports business carried out primarily under the brands ‘Gold Seal Indus Valley’ and ‘Rozana’, to LT Foods Middle East DMCC, a group company of LT Foods Limited (owner of ‘Daawat’). HUL’s decision to divest is in line with its strategy to exit non-core businesses, while continuing to drive its growth agenda in the core packaged foods business.
The deal envisages transfer of the brands and inventory for a consideration of Rs 25 crore, subject to adjustments on closing. The transaction is subject to fulfillment of certain conditions and the parties will work together to complete this over the next few months. HUL will continue to manage the business until the completion of the transaction.
Speaking about the agreement Sanjiv Mehta, CEO & Managing Director of HUL, said: “Over the years, Gold Seal Indus Valley and Rozana have become household names in the Rice category across the overseas markets in which they operate. The brands enjoy strong equity and have been delighting consumers through a range of high quality offerings in Basmati Rice. Given the context of our portfolio priorities, we believe that it is in the best interest of the business to sell these brands to a strategic player such as LT Foods, who is capable and well positioned to unlock their full potential.”
HUL began exporting premium Basmati rice in 1985 under the brand ‘Gold Seal Indus Valley’ to various countries in the Middle East and Europe, which was subsequently extended to other brands and geographies. With the business operating across 21 countries, the current portfolio comprises of Brand Gold Seal Indus Valley Basmati Rice operating in premium segment & Rozana Branded Basmati Rice operating in mid segment. The brands registered a turnover of Rs 51 crore as per audited financials for the year 2014-15.