Mumbai, April 8: Fast moving consumer goods major Hindustan Lever Ltd (HLL) today announced plans to hive off its tea plantation business, comprising both gardens and factories, in Assam and Tamil Nadu to wholly-owned subsidiaries.

The plantation divisions do not fit in with the company?s objective of focussing on the FMCG business, HLL said in a release.

?The company, therefore, believes that it would be prudent to transfer them to separate subsidiaries, which will focus on their operations, both in terms of land and manpower productivity, manage costs and restore economic viability,? the release stated.

Hindustan Lever would seek shareholders? approval through a postal ballot and the board would decide over the consideration and effective date of transfer.

HLL added that this would enable the company to explore joint ventures with other players who have expertise in international sales and marketing. It also did not rule out the possibility of an outright disposal, ?if that is considered to be in the best interests of the business and all stakeholders?. Services of the 12,400 permanent employees of the two divisions would be transferred to the subsidiaries with continuity of service and full protection of their existing terms and conditions of service.

The Doom Dooma division in Assam comprises seven tea estates in the Tinsukia district and three tea-processing factories with about 6,100 permanent employees.

HLL said in the last three years, the division produced 17,100 tonnes of tea. However, it incurred operating losses, primarily due to adverse weather conditions, excess supply leading to low prices at auctions and high social costs.

The tea estates division in Tamil Nadu comprises seven tea estates and six tea-processing factories with about 6,300 permanent employees.