Business News

Consumer goods major Hind Unilever is upbeat on its Indian business model and is planning to try it elsewhere as well, Paul Polman, Unilever CEO told a press meet at Taj Mahal Hotel in Mumbai. ''I am a realistic optimist. We have not yet seen the bottom of the recession and I think recessionary trends will continue for the next 24 months or more. I hope I am wrong, but it is better to be prepared.'' said Polman. Revisiting India to complete an unfinished meal at the Taj Mahal Hotel in Mumbai, where terrorist had taken over on 28 November, Polman said he aims to take the innovations from its Indian operations to other markets where Unilever operates. ''Consumers postpone buying cars, televisions and that frees up a lot of money to spend on everyday needs. We don't see personal care or food markets go down substantially,'' said Polman, ''We are fortunate, that India, Indonesia and South Africa are growing at 5-6 per cent,'' he said, adding that when he set a target on how HUL could double its turnover, the company's executives had appeared unfazed. ''Obviously the population helps,'' he quipped. ''We are in an industry that drives the economy. We put a little bit of powder in a box and a little bit of liquid in a bottle and we sell it to improve the lives of people a little bit more.'' Polman said a company like Unilever is more focused than retailers: Unilever is present in 11 product categories unlike retailers such as Wal-Mart that dabble in at least 100,000 categories. The new Unilever CEO, who had taken the top post barely five months ago from Patrick Cescau, (See: Nestlé's Paul Polman to head Unilever) now wants to put his new found strength to beat the recession and set the bar higher. Expecting the current economic slowdown to continue for at least two years, Polman wants other markets where Unilever operates to follow the example of the innovations made by the Indian subsidiary. Hindustan Unilever in India had made innovations in the body care products like Fair & Lovely and the Ponds skin lightening cream as well as its plan to develop the market for the Pureit home water purifier system, he said. Unilever is also planning to market the Hindustan Unilever product, Pureit water purifier and its popular tea brand Lipton in other markets around the world, he said. With brands at various prices points such as Surf Excel at the premium segment to Wheel at the bottom end and if the company emulates the marketing principles of Hindustan Unilever, then Unilever would be four times bigger, Polman pointed out. Unilever, which has a 52 per cent stake in Hindustan Unilever, now wants to improve its sales in its existing brands in the foods segment by driving people's habits rather than waiting for the consumer to change their habits in favour of packaged foods. Since the market in India for packaged foods is a mere 5 per cent, the packaged foods sales of Unilever's business is half of the company's business in other countries and it wants to increase the market in such a large country like India. The FMCG sector in India has shown double-digit growth rates compared to markets in the US, Europe and Japan, where recession has evaporated sales while developing and emerging markets like India have become the backbone of the company's turnover with 50 per cent contribution of Unilever's turnover. Within five months of his taking over as CEO of the company, Polman was forced to take certain unpleasant steps to deal with the global economic slowdown like ordering a pay freeze to management personal, a cut in travel budgets, doing away with sales and margin targets set by the previous CEO, is predecessor, appointing a global procurement officer to save cost in order to achieve economies of scale. It has also resorted to axing jobs and has reduced its staff strength from approximately 206,000 at the beginning of 2006 to around 170,000 at the end of 2008 from 100 countries worldwide.