P&G to outsource Vicks exports manufacture

Our Corporate Bureau
03 October 2002

Hyderabad: Procter & Gamble Hygiene and Healthcare (PGHH) has announced its decision to outsource the manufacture of Vicks VapoRub exports to the Hyderabad-based contract manufacturer Maksons.

This is an outsourcing arrangement that will enable PGHH to continue exporting Vicks VapoRub to Australia, Japan and other Asian countries, but at more competitive rates while maintaining its high quality. PGHH will continue to manufacture Vicks VapoRub for domestic sale at its plant at Kundaim, Goa.

This arrangement will help PGHH achieve cost-efficiencies, stay competitive in the market and the contract manufacturer to expand its manufacturing base and optimally utilise the plant to deliver quality products at competitive prices. This move will not affect the interest of PGHHs shareholders, the companys financials or the availability of its brands in India.

As part of this deal, the contract manufacturer will purchase from PGHH land, building and machinery of P&Gs Hyderabad factory, where Vicks VapoRub is currently being manufactured, for an undisclosed amount. The transition will happen over the next three to four months.

PGHH is working closely with its 60 employees at the Hyderabad plant to assist them with transfer opportunities to other P&G sites. Those who do not find such transfer opportunities will be provided career counselling, retraining and financial support to assist them to transition to new beginnings.

Says PGHH managing director Shantanu Khosla: "People have always been the foundation of our success and we appreciate the commitment and outstanding contribution made by our employees at the Hyderabad plant. This was a tough business decision and in no way reflects on the quality and dedication of our employees at the plant. We will do our best to transfer them to other P&G sites and help them find alternative employment opportunities by providing career counselling, retraining and financial support."