P&G says won't renew contract mfg deal with JHS in Himachal

Consumer goods major Proctor & Gamble India today said it has decided not to renew its contract manufacturing arrangement with its Himachal-based contractor JHS that makes Tide detergent, due to latter's financial instability. "It is a non-renewal of one of our contracts with JHS for Tide, which was due to expire by June-end. The decision for non-renewal of the contract has been taken after discussions with JHS, and is a result of the financial instability at JHS, which could result in violations of contractual obligations," P&G said in a statement. P&G, however, said it intends to continue its contract manufacturing with JHS for its oral care brands. JHS, which is a listed company, employs 550 workers at the Kala Amb plant that makes Tide. When asked about the fate of the employees, P&G said, "we have fulfilled all contractual obligation with JHS. We trust JHS to act in the best interest of its employees." P&G also said the company will continue making long-term investments at its Baddi plant.

Also read: Procter & Gamble brings back AG Lafley as CEO Meanwhile, workers of JHS Kala Amb unit, who have reportedly been informed about this development only informally and been given notice till June 30, held a silent protest at the P&G headquarters here. "We were taken on a 10-year contract for this facility in 2009. Two months ago we were informally given a notice terminating our service from June end. We are here to request P&G to accommodate us in any of their other facilities or renew their contract with the Kala Amb unit," JHS Kamgar Samiti member Pawan Kumar said.