The Foreign Investment Promotion Board (FIPB) is evaluating
a proposal mooted by Wimco Ltd to enter into tie-ups with
manufacturers of consumer and industrial products that
can be distributed through its own network of wholesalers,
distributors, stockists and clearing and forwarding agents.
safety match firm Swedish Match AB controls a 53-per cent
stake in Wimco. In its proposal Wimco has sought the FIBP''s
permission to enter into tie-ups with manufactures in
various segments such as herbal cough syrups, lozenges,
disinfectants, deodorisers, spices, mosquito repellents
and incense sticks.
proposed ''cash-and-carry wholesale trading activity'' will
initially involve Wimco entering into tie-ups with manufactures
of consumer products for distributing the same to customers
in India through its own network.
company proposal said as per the industrial policy of
the Indian government and relevant foreign exchange management
regulations, foreign investments up to 100 per cent in
the proposed cash-and-carry wholesales trading is subject
to necessary approvals by the Indian government.
reasons for the move, the company said in the 2003-04
Union Budget, the levy of excise duty has been removed
from all segments other than the mechanised sector, which
has severely impacted Wimco''s bottomline. Competition
from the unorganised sector has seen Wimco''s market share
erode gradually from 18 per cent to about 12 per cent,
even though it is a major contributor of excise revenue
in this sector.
is engaged in the business of manufacturing and distributing
safety matches in India with production facilities at
four locations Maharashtra, Uttar Pradesh, Tamil
Nadu and West Bengal. Wimco has an installed capacity
of 5-billion matches per year.