Sachin to sell Reynolds pens

25 May 2006

Chennai: He may not be doing too much on the cricket field, but master blaster Sachin Tendulkar will soon be going out to bat for Reynolds pens, made by the Rs175-crore GM Pens International Pvt Ltd. On 15 May 2006, the company's promoters announced Sachin's signing, as well as showcased the company's product portfolio, which has grown from a single product to 150 shop keeping units (SKUs).

Stake sale?
Other developments are also in the air, including a possible stake sale to the US-based Sanford Corporation, owner of the Reynolds brand and part of the $7-billion Newell Rubbermaid group. The company is entering the pencils and stationery segment, expanding its the pen store chain Writesite, and also looking at setting up ball point pen vending machines.

"We are open to the US company acquiring some stake in our company," says Managing director K Mohamed Meeran, "and it may happen two or three years down the line." Is that a result of pressure? Originally the French company Reynolds owned the brand, and it had licensed GM Pens to use it in South Asia. In 1999, Sanford acquired the global operations of Reynolds, including its pen tip making unit near Chennai. The total global sales of Reynolds branded products are now $250 million.

Before the Reynolds takeover, Sanford's parent Newell Rubbermaid had a 50-per cent stake in Luxor Writing Instruments Pvt Ltd, which manufactured Parker, Waterman, PaperMate and Pilot pens in India. The Indian promoter bought out Newell Rubbermaid's stake sometime in 2001, and secured the licence to make and sell the brands in India.

With two licencees in India, no presence of its own and a fast-growing market, did Sanford exert pressure on the promoters of GM Pens to part with a stake? Since it supplies two crucial items for the pens – ink and the tip – Sanford can start selling the Reynolds brand on its own if it refuses to renew GM's licence on its expiry. Is the relationship reaching the proverbial seven-year itch?