Godfrey Phillips signs 9-year contract manufacturing pact with Polisetty Somasundaram Tobacco

Cigarette and tobacco product makers, Godfrey Phillips India Ltd, on Wednesday (May 27), said it has signed a contract manufacturing agreement with Polisetty Somasundaram Tobacco Products (India) Private for the manufacturing and delivery of cigarettes and other tobacco products.Under the agreement, Polisetty Somasundaram Tobacco Products will manufacture products exclusively for Godfrey Phillips at its manufacturing facility in accordance with specifications and standards prescribed by the company. The products will be manufactured using production materials supplied by Godfrey Phillips on a contract manufacturing basis.

The company said it will pay Polisetty a manufacturing fee comprising fixed and variable components during the term of the agreement. Polisetty will make efforts to set up the manufacturing facility and obtain the required licences and approvals to commence operations within 12 months.
Also Read: Godfrey Phillips Q4 on fire as net zooms 86%, margins nearly double; ₹33 dividend onGodfrey Phillips may also provide machines and equipment to Polisetty on a bailment basis for use in manufacturing the products. The initial term of the agreement is nine years and includes customary terms and conditions, including warranties and indemnities.

Godfrey Phillips said the agreement will help augment production and ensure the uninterrupted availability of products. The company added that the transaction does not fall under related party transactions and that promoters or group companies do not have any interest in the entity.

Shares of Godfrey Phillips India Ltd ended at ₹2,310.45, up by ₹10.55, or 0.46%, on the BSE.

Also Read: This cigarette-maker is down 5% in trade today after surging 25% in the last three sessions