Trade mark costs - but who pays?

Trade mark costs - but who pays?
Published: 18 April 2006

The independent shareholders of PT Holcim Indonesia Tbk agree that the cement company has to pay 0.7 per cent of the total sales for utilising the trademark of Holcim. They approval was signed on the second extraordinary general meeting of shareholders yesterday, after the first one could not meet the quorum. As much as 62.75 per cent of independent shareholders attended the meeting, and 88.89 per cent of them approved the proposal on trademark payment fee.

"The payment fee is the consequence of the trademark utilization. It is about the property right," said the Director of Holcim Indonesia Jannus Hutapea yesterday. The President Director of Holcim Indonesia Timothy David Mackay said that the fee of 0.7 per cent was for all units of the company in 70 countries. The company uses the fee to finance the promotion program so that the brand will be perceived positively by the consumers.

But Mackay declined to comment on the impact of the fee to the profitability of the Indonesian unit. He just said that the trademark utilisation will be positive for Holcim Indonesia. Mackay also did not disclose the cost to introduce the brand name of Holcim to Indonesian consumer. "I cannot tell you the figure. But we will be careful. We don’t want to hold great promotion this year," he said.

Holcim Ltd, through Holderfin BV Ltd, controlled 77.3 per cent shares of Holcim Indonesia. The company operates three facilities in Narogong (West Java) and Cilacap (Central Java).