Monday, June 15, 2009

Recession unveils new business opportunities for Hindustan Unilever Limited: Paul Polman, CEO, Unilever

Paul Polman, Chief Executive Officer, Unilever, revealed that Hindustan Unilever Limited (HUL) is going to double its business growth in India and increase its presence in the packaged food business. Mr. Polman came on a two day tour in India. Upon his visit, he held a two-hour meeting with the executives of Hindustan Unilever on March 14, 2009 where, he talked about HUL’s business strategies in India.

In a meeting with the reporters at Lever House, the headquarter of Hindustan Unilever, Mr. Polman said that recession is not an excuse for business to go down. Instead, it has opened up new opportunity for the company. Consumers have stopped buying cars and television which means that they are going to spend money on daily necessities.

Mr.Polman said that there is tremendous opportunity for business in India and HUL has strong food brands like Knorr. Instead of waiting for people to change their habits, Mr. Polman said that Hindustan Unilever would work hard to attract people to buy packaged foods. Nitin Paranjpe, Managing Director and CEO, HUL, said that the current size of company’s packaged food business is only 5% but in other regions food business comprises half of Unilever’s business. Mr, Paranjpe believes that his company can create a large food market in India. However, instead of creating any new brands, the company is going to consolidate and strengthen its current brands including Knorr soups, Kissan, etc.

Mr. Polman told reporters that his executives did not show any disbelief when he told them that he wanted to double the business growth in the region. Such high optimism reassured him that HUL was in a much better situation to face the current recession which he had predicted to continue for 18-24 months.

In order to survive the recession, HUL took necessary measures such as, freezing management pay, reducing travel budgets and manpower from 206,000 to 170,000 by the end of 2008, readjusting fixed components of salary and variable payments, accelerating cost savings through the appointment a global procurement officer to procure raw materials, scrapping previous sales margin targets and simultaneous release of products in different regions.

Hindustan Unilever Limited formerly known as Hindustan Lever Limited is India’s largest consumer products company. Unilever holds 52% stake in Hindustan Unilever. In 2008, Unilever had a turnover worth 40.5 billion Euro and the company is looking forward to add one billion new customers in the emerging markets that comprises 48% of Unilever’s global sales. In the last quarter of 2008, HUL observed a net increase of 17% in its sales.

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(This entry was originally published in March 2009)

1 comment:

  1. Dear Sir,

    It was good to hear your thoughts & experience.I would like to ask a question about HUL- Smollan (HUFS)Joint venture.My question is why People like me are loosing their jobs with this colaboration. It may have some benifit to our organization but why our careers is putting on toss? When we have joined the organization than we have cleared the interview upto HUL expectations. Now HUFS is not ready to absorb us since we are not fit as per their expectation. It was told that HUL and HUFS have same working platforms in terms of executions and activations then why this difference in Recruitments...I am so sorry to say but I dont have any medium except this. looking forward to hear from you.