Mumbai, May 26: Hindustan Lever (HLL) is setting up a 50:50 joint venture with Gist Brocades International of the Netherlands for manufacturing fresh and instant dry yeasts in the country. The new company, Lever Gist Brocades, will set up manufacturing facilities in the state. Gist Brocades International BV is the 100 per cent subsidiary of Royal Gist Brocades of the Netherlands.

According to the company, the project is expected to start yielding commercial returns within a short span. The gestation period is around two years. The company is subject to the government and Reserve Bank approvals.

The venture has been formed on the lines of Kimberley Clarke, in which the foreign partner brings in the technology for the product, while HLL takes care of marketing and distribution. The other 50:50 joint venture, which HLL has recently entered into, is Lever Johnson for household products.

HLL is seeking shareholders' approval through a special resolution at the annual general meeting on June 24 for subscribing to 75 lakh equity shares of Rs 10 each at par, constituting 50 per cent of the issued and subscribed capital of Lever Gist Brocades.

Gist Brocades International BV is among the largest producers of bakers' yeast, penicillin and its derivatives and enzymes. The planned venture aims at producing some of these products with the technology obtained from Gist Brocades, conforming to the global standards.

The company intends to produce dry yeast with a longer shelf life. HLL has a well-established network as part of its professional marketing group (PMG) for serving the bakery industry. This is mainly in relation to bakery fats. The venture will avail of the distribution reach of the PMG of the company for a fee which would equal the royalty paid for the supply of technology to Gist Brocades International.The company says that such distribution will be synergistic with the company's own bakery fats business.

Bread manufacturing, which is a part of the bakery industry, has a sales volume of over one million tonnes, said industry sources.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.