Hutchison Whampoa says it plans to buy an ailing Shanghai company that makes toothpaste and cleaning products - and more importantly does so from two hectares of prime city land along the Huangpu River. The target, White Cat, was once a household name with a popularity that spread among Hong Kong people during the 1980s, particularly for its cleaning products. However, under competitive pressure from foreign big name rivals Procter & Gamble (P&G) and Unilever, the state-owned company began losing money in 2001 and is now in the process of selling assets to stay afloat. A spokeswoman for Hutchison has confirmed talks aimed at taking a 70 per cent stake in state-owned Shanghai White Cat were under way, but said no formal agreement had yet been approved by the local government. Local papers, quoting unnamed sources, say the price tag for the stake is at least 100 million yuan, and the deal has been submitted to municipal government departments for approval. Ten per cent of the unsold equity, the reports say, will be retained by the company's Hong Kong founding firm, Sun Hung Kai (not to be confused with the property group of the same name), and 20 per cent by the existing Chinese state-owned shareholder. The spokeswoman said the deal size was still subject to change because the negotiations had yet to be completed. Under a preliminary agreement, Hutchison will keep the White Cat trademark but not the land use rights on the prime site. According to White Cat's 2003 annual report, the company's net asset value amounted to 131 million yuan that year, of which the land accounted for about 75 per cent. Local reports said a new factory would be established on a site in the suburban area of Jinshan, almost 100km from its present city-centre location. The existing site in the Xujiahui district on the Huangpu River would then be cleared for future redevelopment, the reports said. A spokesman said Hutchison Whampoa was aware of the relocation reports but was making a bid only for the White Cat brand and manufacturing assets. 'As far as I know, the factory site is not our focus in this deal,' a spokeswoman said. Hutchison first entered the mainland manufacturing business by setting up an initial 30 per cent-held joint venture with P&G in 1988, which turned out to be a very successful partnership. However, in 1997, it transferred about 10 per cent of its interest to P&G, and provided options for it to buy the remaining 20 per cent between 2007 and 2017. P&G exercised the option last year for US$2 billion, handing Hutchison an exceptional gain of $13.7 billion on the sale of its remaining stake. An analyst with a European investment firm said it was still too early to say whether Hutchison was intent on gearing up its investment in manufacturing operations since the size of the White Cat deal was small. Established in 1948, White Cat produced well-known brands such as Maxam toothpaste and White Cat cleaning products. The company reached its sales peak in the mid-1990s, with annual revenues of 1.7 billion yuan and mainland production of 300,000 tonnes.