Hutchison to boost investment in China Whitecat JV

SHANGHAI (Reuters) - Hong Kong tycoon Li Ka-shing's Hutchison Whampoa (0013.HK: Quote, Profile, Research) will inject an extra 1 billion yuan ($143 million) into a venture with detergent and toothpaste maker Shanghai Whitecat Group to help revive the 60-year-old Chinese brand.

Hutchison's China unit said on Monday it had received a green light from China's Ministry of Commerce to increase its investment in Shanghai Hutchison Whitecat Co, although its 80 percent stake will remain unchanged. The venture plans to spend more than 3 billion yuan to promote the Whitecat brand.

A report in China's National Business Daily over the weekend that Hutchison was about to boost its investment in the venture and was likely to acquire control of Shanghai Whitecat Group had sparked a 10 percent surge in the shares of Whitecat's listed unit, Shanghai Whitecat Shareholding Co (600633.SS: Quote, Profile, Research).

"Our short-term goal is to boost market share and competitiveness of the Whitecat brand," Du Zhiqiang, chairman of the venture, said in a statement. "Our long-term goal is to make Whitecat a leading local brand that can compete with international giants."

Hutchison spokesman Jeremy Lau declined to comment on whether Hutchison had plans to invest in Whitecat Group or its listed unit.

Whitecat Group, whose namesake detergents and Zhonghua brand toothpaste are well known in the Shanghai area, has been struggling to survive in a market dominated by foreign consumer goods companies such as Unilever Plc/NV (ULVR.L: Quote, Profile, Research)(UNc.AS: Quote, Profile, Research) and Procter & Gamble Co (PG.N: Quote, Profile, Research).

Its Shanghai-listed unit posted a net loss last year and has forecast it will remain in the red in the first quarter of 2008 as its exports are hurt by yuan appreciation.

Shanghai Whitecat Shareholding's shares surged by their 10 percent daily limit on Monday for a second consecutive session, to 9.41 yuan, in stark contrast to a 5.6 percent tumble in the Shanghai benchmark index .SSEC.

The company said it was not aware of any plan for Hutchison to acquire its parent firm.