By Ding Qingfen (China Daily)
Updated: 2007-07-11 12:19

A family pose beside the Zhonghua toothpaste model. Unilever China is not planning to acquire the popular toothpaste brand Zhonghua that it now makes and sells under license from a domestic company. [newsphoto]

Zhonghua toothpaste contributes about one-sixth of Unilever China's revenue. Yang Fan Despite media reports, Unilever China is not planning to acquire the popular toothpaste brand Zhonghua that it now makes and sells under license from a domestic company.

Instead it has been using its resources to further promote the brand for long-term growth, Wu Liang, senior corporate communications manager of Unilever China, told China Daily yesterday.

Wu's comments came in response to local reports that Unilever is

planning to buy Zhonghua - owned by Shanghai Whitecat Shareholding Co Ltd, which licenses the brand to Unilever - or even acquire Whitecat itself.

"Zhonghua is a very strong toothpaste brand and Unilever expects to run the brand as long as possible. We absolutely have no idea about the so-called buyout and we are not in discussions with Whitecat on it," Wu said.

But "we would be one of those that hold the greatest interest if Whitecat intended to sell Zhonghua someday", she said. "But the possibility is almost zero."

Unilever has been producing Zhonghua through a licensing agreement that began in the late 1990s when Whitecat was formed.

"The business has been going very well, with annual sales generated from Zhonghua continuing to rise by double digits and the momentum is definitely expected to continue," said Wu.

Although she refused to disclose Zhonghua's market share, statistics from ACNielsen show that the top three brands in 2006 were P&G's Crest, with 23.2 percent of the market, Colgate with 21.6 percent share and Zhonghua, with 11.9 percent of total toothpaste sales.

The market for toothpaste has continued to show strong potential as the Chinese, particularly in rural areas, become more concerned about oral hygiene.

Both Zhonghua's growth and the upward trend of the domestic market were listed by local media as motivations pushing Unilever to an attempted buyout of Zhonghua.

"It is true that we could get more benefits if Unilever owned Zhonghua, but we now feel comfortable as Whitecat has provided us a free hand to grow Zhonghua without interference since 2000," Wu said.

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