Bizbits — Excise hike to hit cos

MUMBAI, June 21: The announcement to levy excise duty on cosmetics and toiletries on the maximum retail price (MRP) from July 1 will have a...

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MUMBAI, June 21: The announcement to levy excise duty on cosmetics and toiletries on the maximum retail price (MRP) from July 1 will have a major impact on the bottomlines of companies like Pond’s India, Lakme-Lever and Hindustan Lever.

Currently, the excise duty on cosmetics & toiletries is 30 per cent. The newly imposed excise duty would be calculated at 50 per cent of the MRP declared on the notified cosmetics and toilet preparations. These include talcs, colour cosmetics and shampoos while toothpastes and toothpowders have been spared.

The excise duty on cosmetics and toiletries was progressively brought down from 120 per cent to 30 per cent in 1997. This has resulted in lower consumer prices which has made these products more affordable to consumers leading to growth in demand.

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The Rs 1,200-crore cosmetics and toiletries industry is growing at 25 per cent as against a marginal five per cent last year. This growth is likely to slow down with the levying of the excise duty on MRP.

Mitsu Industries

MUMBAI — THE Vapi based Agro-chem major Mitsu Industries, the part of Rs 275 crore Bilakhia group has achieved an impressive export performance of more than Rs one billion for 1996-97. With this all time high export performance the company becomes the third largest exporter in the agro-chemical industry in the fifth year of its operations.

Explaining the export performance of the company, the group president Satish Khanna said that company’s export has grown from Rs 2 crore in 1994-95 to Rs 21 crore in 1995-96 and to Rs 101.2 crore in 1996-97. What is distinctive about Mitsu’s growth in exports is its ability to introduce new products based on complex Chemistry, getting its products registered in major markets of the world, significant invesmtnets in technology management, adhering to CGMP and developing strategic business relations.

Pond’s-HLL

CHENNAI — Some shareholders of Pond’s India Ltd have expressed reservations about the company’s proposed merger with Hindustan Lever Ltd. Since the preferential share allotment had been settled amicably, the shareholders, at the annual general meeting held on Friday, were of the opinion that the pending bonus issue would also be settled. “Will it be a case of the big brother gobbling up Pond’s?” a shareholder asked.

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The issue was not on the agenda for discussion at the AGM as the compromise was worked out only last week whereas the notice to the shareholders had been sent nearly a month ago. However, shareholders felt that a merger would not be beneficial to them. The objection was on the grounds that Pond’s had a better growth record than HLL and that the dividend paid out by the company was higher than HLL’s dividend.

The company’s chairman said HLL would review the issue and try to provide a solution which would enhance shareholders’ value.Motorola

MUMBAI — Motorola, the $28 billion, US Telecom giant launched the Star T A C GSM Cellular Telephone in India. The phone incorporates the Motorola design and is able to operate with two removable batteries at the same time. Announcing the launch, B V Raman, Executive Director, Motorola Cellular Subscriber Group, said “ We are confident that this phone will set new standards.