UNILEVER TO SELL OFF QUEST INTERNATIONAL
Byline: James Fallon
LONDON — Unilever PLC announced plans Tuesday to sell its specialty chemicals division, which includes the fragrances and flavors supplier, Quest International.
Niall Fitzgerald, chairman of Unilever PLC, said that while the specialty chemicals division is successful, it no longer fits in with Unilever’s focus on consumer goods, especially in developing and emerging markets.
The division had a 19.6 percent increase in operating profits last year to $688.8 million (420 million pounds) from 351 million pounds on a 4.7 percent rise in sales to $4.88 billion (2.98 billion pounds) from 2.84 billion pounds.
Quest, which has its headquarters in The Netherlands, is one of the world’s major flavor and fragrance suppliers. It has a fragrance research operation in Paris and a location in Ashford, England, dealing with flavorings and ingredients for food and personal products.
Observers said a sale of Quest might be a boost for the company. Quest’s development in some instances has been held back by being part of Unilever, since many of Unilever’s competitors in personal products have been reluctant to give projects to Quest for fear details might leak to its parent company.
An independent Quest would be able to work for more major companies, executives speculated.
Fitzgerald stressed that there is no time frame for a sale of the division and that Unilever is not in talks with any potential buyers. The company has appointed Lazard Bros. & Co. Ltd. and Lazard Freres & Co. LLC to handle the sale.
The Anglo-Dutch group revealed its divestiture plans while reporting its financial results for the year ended Dec. 31. The company said its personal products division — which includes Elizabeth Arden, Helene Curtis, Chesebrough-Ponds and Calvin Klein Cosmetics — had a 24.6 percent increase in operating profits to $1.06 billion (648 million pounds) on an 18.3 percent gain in sales to $8.79 billion (5.36 billion pounds).
In 1995, the company had operating profits of 520 million pounds on sales of 4.53 billion pounds.
The division was boosted by the acquisition of Helene Curtis during the year, although profit growth was held back by higher launch costs at Calvin Klein Cosmetics and Arden, Fitzgerald said.
Arden had successful launches during the year of its 5th Avenue women’s fragrance and Elizabeth Taylor’s Black Pearls scent, the chairman said. The Arden business continues its turnaround after a disappointing 1995, when it was hit by restructurings, consolidations and the departure of chief executive Kim Delsing.
Unilever said last February that it would take up to 18 months for Arden to get back on track. “We are about where we would like to be now with Arden,” Fitzgerald said, confirming that the 18-month timetable is still realistic. “The launches have gone well, and we have several more things up our sleeves for 1997. We probably are where we could reasonably expect to be.”
Overall, Unilever reported a 10 percent increase in after-tax profits to $2.77 billion (1.69 billion pounds) on a 6 percent rise in sales to $54.98 billion (33.52 billion pounds) last year. In 1995 after-tax profits were 1.54 billion pounds on sales of 31.52 billion pounds.
Earnings per share rose 9 percent to $1.41 (85.9 pence) from 78.6 pence.