75 years of Independence…

FMCG SECTOR
FMCG SECTOR
>> 4th largest sector in the economy

>> total market share of Rs 450 bn

>> growth of 50% by 2010

>> main players
HUL,ITC, COLGATE-PALMOLIVE,NIRMA
 HINDUSTAN UNILEVER
LIMITED
• Type Public
• Founded 1933
• Headquarters Mumbai, India
• Key people
Harish Manwani Chairman
Douglas Baillie, CEO

• Industry Fast moving consumer goods

• Products Home and personal care,food and
beverages
• Employees 15,000
• Parent Anglo-Dutch Co. Unilever
 HISTORY
> 1931, Unilever set up its first Indian
subsidiary of Hindustan Vanaspati
Manufacturing Co.
> 1933, Lever Brothers India Limited
> 1935 ,United Traders Limited .
> 1956 ,formed Hindustan Lever Limited.

> July 19, 2007,changed the name to

Hindustan Unilever Limited
ESTABLISHMENT
ESTABLISHMENT

• Hindustan Unilever Limited (abbreviated to

HUL) formerly Hindustan Lever Limited is
India's largest consumer products
company and was formed in 1933 as
Lever Brothers India Limited
 HUL
>> Largest FMCG Co. in India
>> 20 distinct categories
# home and personal care products
# food and beverages
>> manufactured by 40 factories across India
>> combined volume of 4 million tonnes
>> sales of Rs 10,000 crores
>> 51.55% of equity held by parent Co. Unilever
>> rest distributed among 380,000 individual shareholders and
financial institutions
>> distribution reaches 6.3mn retail outlets and 250 rural
consumers
>> Golden super star trading house
:
POPULAR BRANDS
• BATHING SOAPS: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove,
Pears and Rexona

• LAUNDRY ITEMS: Surf Excel, Rin and Wheel

• SKIN CARE: Fair & Lovely, Pond’s and Vaseline
• HAIR CARE: Sunsilk and Clinic
• ORAL CARE: Pepsodent and Close up
• DEODORENTS: Axe and Rexona
• COSMETICS: Lakme
• AYURVEDIC: Ayush
• TEA: Brooke Bond and Lipton
• COFFEE: Bru
• FOOD: Kissan, Annapurna and Knorr
• ICE CREAM: Kwality Wall’s
 MISSION

>>> to add Vitality to life.

>>> help people feel good, look good and

get more out of life.

MANAGEMENT STRUCTURE
> HEADED BY CHAIRMAN

> 5 WHOLE TIME DIRECTORS

> 5 INDEPENDENT NON-EXECUTIVE

DIRECTORS
MANAGEMENT STRUCTURE

Mr.Harish Manwani
Chairman

Mr.Douglas Baillie
CEO and Managing Director
75 years of Independence…
PRODUCT SECTORS

Detergents
So
a
Food p

Deodr Health
SECTORS
ants Care

Co
sm
Oral C tic e
are s
Hair Care
PRODUCTS
 SOAP BRANDS

• LUX
• BREEZE
• REXONA
• LIRIL
• HAMAM
• LIFEBOY
• DOVE
• PEARS
 SOAP MARKET
 60% Market Share
 The strategy for 2006-07 would be to increase
the market share from existing 60% to 70%.
 Competitors :GodrejSoap: Cinthol , Shikhakai,
Evita, Cinthol
 Strategies
 New product offering i.e. Fair & Lovely soap
 Share went down from 3.6% to 2.4% 2006-
2007
 DETERGENTS

Market share 2.5% -35%

 Surf Excel, Rin,Wheel

 Competitor - P&G - Ariel and Tide , Nirma
 STING Policy against Nirma
 PERSONAL CARE SECTOR
Loosing 4.5% market share
 Fair & Lovely, Ponds,Vaseline
 Strategy-BOGOF
 HLL is the market leader in the shampoo
category with an 50 per cent market share
 Shampoos-Sunsilk, Clinic plus,Clinic All Clear
 ORAL CARE SECTOR
 Pepsodent,Closeup
 Competitor-Colgate
 Pepsodent and CloseUp, grew at 11% Colgate
brand grew at 14%
 Unilever has a market capitalisation of $95
billion against Colgate's $34 billion. Unilever's
annual sales are around $50 billion which is
almost four times Colgate's $13 billion.
 FOOD SECTOR

 Market share 70%

 TEA:Brook Bond,Lipton
 COFFEE: Brook Bond Bru largest brand.
 Food: Kissan, Annapuna, Knorr-Largest brand
 Ice Creams- Kwality, Amul
 28%
HUL’s market share 38%
dropped to 18.6% in TEA
Coffee
volume terms.
Icecream

Coffee-Nescafe’s
34%
share slipping from
31.8% to 23.6%.
Coffee Market Share 30
25
21% 20
15
10
5
0
Tea Coffee Icecream
GROWTH IN THE PRODUCTS
Penetration %
Toilet Soaps
90%
Tea
70% Laundry - NSD

50% Toothpaste
Shampoo

30% Ice-Creams Skin Creams

Colour Cosmetics Staples
Tomato Deodorant

5% 10% 15% Growth %

 MARKET
POSITION
MARKET LEADER STRONG NUMBER
2
Personal Wash 60%
Fabric Wash 42% Oral 36%
Household Care 62% Hair Oils 14%
Skin Care 53% Instant Coffee 36%
Hair Care 63% Ketchup
Talcum Powders 65% 39%
Branded Tea 35%
Ice Creams 25%
Jams & Squashes 78%
R&G Coffee 56%
Branded Staples 15%
Branded Salt 18%
Cooking Fats & Oils
75 years of Independence…
 “INDIAN CONSUMER”
• The Indian middle class is prospering with around 70
million households earning anywhere between Rs80,000
and Rs18 lakh per annum. These comprise 34 per cent
of the slightly over 200 million middle class households.
• Indian Consumer is no longer Price Obsessed.
• Indian consumer goods market is expected to reach
$400billion by 2010
• Higher disposable incomes, there is money left over for
daily products even after spending on durables
 “FMCG Tricks”

• Main reasons for the revival in the FMCG space is that the
wallet share of the consumer which was being diverted to
aspirational products is now coming back to FMCG products.
• Indian consumer on spending spree.
• There is a difference between FMCG and Consumer
Durables.
 Why Name Change ?
• Provides Optimum balance between maintaining the
heritage of the company and the future benefits with the
corporate name of Unilever. (February 20, 2007).

• Will be source of considerable strength and synergies to

harness Unilever’s global scale and size for the benefit
of the Indian business both in domestic and export
markets.
• It would also assist in attracting and retaining talent both
locally and internationally
 “Edge Over Competitors”
• Unilever, in its worldwide operations, strives to be a
multilocal multinational. Working since 1912.
•Reflected national priorities over the years and remained
committed towards India.
•Large market capitalization and Product Variety.
•Good Company policies such as:-
Developing and using relevant technology
Generating productive employment
Stimulating industrialization and dispersing its benefits
Adding value to agriculture
Sustaining export performance
• Experimenting and taking • System driven and
aggressive steps. conservative manner.
• Caught in scandal -- • Closely linked to parent
whether on excise duty Unilever.
disputes.
• Situation has changed, • Profits has decreased
P/E ratio is greater than even when the market is
HUl. growing above 10%.
• E-Choupal • Project Shakti.
 “Project Shakti”
• To distribute their products in remote rural areas through
its Project Shakti. (2000).
• Thirty per cent of FMCG business comes from villages
with a population less than 2,000
• To reach areas of low access and low market potential.
Currently covers all districts of Andhra Pradesh and
Karnataka, reaching almost 5,000 villages through 800
self-help groups (SHGs).
• The Shakti model trains women from SHGs to distribute
HLL products of daily consumption such as Detergents,
Toilet soaps and Shampoos
 “Company Profits”
7000
6000

5000
4000
Quarter Ending
3000 Profits in Million
2000

1000
0
Jun,06 Dec,06 Jun,07

Source: Company Reports

 “Modern Day Scenario”
• For the quarter ending June 2007, HUL has posted a
growth of 13%(8%, 2006) in net sales to reach Rs. 34.31
billion. The profits have been even better off, with PAT
growing at 24.4% to reach 4.72 billion.
• The company is on a cost cutting spree, with reduced
expenditure on advertisement by 2.7%( over 900
million).
• FMCG BSE Index is above 2600 points.
• Share Khan has given BUY recommendation for HUl
with CMP of 204.7 having Target price of 290.
 “Mergers and Acquisitions”
• Amalgamation of new businesses -- Brooke Bond Lipton
India in 1996-97; Pond's India in 1998; and a smaller
subsidiary, Industrial Perfumes, in 1999
• The erstwhile Tata Oil Mills Company (TOMCO) merged
with HUL, effective from April 1, 1993
• In 1995, HUL and yet another Tata company, Lakme
Limited,
• HUL formed a 50:50 joint venture with the US-based
Kimberly Clark Corporation in 1994
• In 1992, the erstwhile Brooke Bond acquired Kothari
General Foods, with significant interests in Instant
Coffee
• In 1993, it acquired the Kissan business from the UB
Group and the Dollops Icecream business from Cadbury
India.
• In1994, the company entered into a strategic alliance
with the Kwality Ice-cream Group families and in 1995
the Milk food 100% Ice-cream marketing and distribution
rights too were acquired.
• In January 2000, in a historic step, the government
decided to award 74 per cent equity in Modern Foods to
HUL, thereby beginning the divestment of government
equity in Public Sector Undertakings (PSU) to Private
sector partners. HUL's entry into Bread is a strategic
extension of the company's wheat business. In 2002,
HUL acquired the government's remaining stake in
Modern Foods.
• In 2003, HUL acquired the Cooked Shrimp and
Pasteurized Crabmeat business of the Amalgam Group
of Companies, a leader in value added Marine Products
exports.
Every 2 out of 3 is effected.
 Awards
 Hindustan Unilever Limited (HUL) was conferred
the Commendation Certification for Significant
Achievement in HR Excellence by the Confederation
of Indian Industry (CII). Mumbai, October 22, 2007:
 Hindustan Unilever Limited (HUL) was in
September 2007 rated among the top four companies
globally in a global study of ‘Global Top Companies
for Leaders’ by Hewitt Associates in partnership with
Fortune magazine and the RBL Group
 Awards
 HLL has been declared a Mini Ratna by the
Government of India .
 Upgraded in 2006 as a Schedule B Company by
the Department of Public Enterprises
 HINDUSTAN Lever Ltd (HLL) has bagged 20 India
Star awards and three Asia Star awards for innovation
in packaging concepts and systems.

Source: Times of India

Profit Trends For Past Five Years
2000
1800
1600
1400
1200
1000
NetProfit
800
600 In Rs. Crores
400
200
0
2002 2003 2004 2005 2006
Source: kotaksecurities.com
 Future Plans
 HLL has drawn up a comprehensive plan to expand its
portfolio in the area of Health Care and Contraceptives.
 Chemicals business (encompassing Flavours,
Fragrances and other Specialty Chemicals), as well as
several non-FMCG export businesses such as
Thermometers and Mushrooms.
 HLL has been pepping up its rural distribution systems
and has launched low unit price variants of its popular
brands to draw in new users in the rural areas.
 Social Responsibility
 Hindustan Latex set up the Hindustan
Latex Family Planning Promotion Trust
(HLFPPT) a not for profit organization, for the
purpose of designing and implementing social
sector intervention projects, particularly in the
area of Reproductive Health, Women
Empowerment and HIV prevention and
control activities, with the objective of
creating planned social change.
 HLFPPT is today India’s top social
marketing organization.
 Social Responsibility
 HLL promises a `Golden Future' for girl
child.
 PROJECT SHAKTI :The objectives of
Project Shakti are to create income-
generating capabilities for underprivileged
rural women by providing a small-scale
enterprise opportunity, and to improve rural
living standards through health and hygiene
awareness.
 Future Technology
Third Party Logistics (3PL): 3PL describes
businesses that provide one or many of a
variety of logistics-related services. Types of
services would include public warehousing,
contract warehousing, transportation
management, distribution management,
freight consolidation.
 Conclusion
With it’s long and luminous history HUL is India’s true pride. It
is a company which the customers in rural as well as urban India
relate to. This explains the deep penetration of HUL in Indian
market.
Past few years trends may be disturbing but there has been multi
facets to the decrease in profits. It would be innocent thought to
rule out a behemoth of the ranks of HUL.
The future for HUL is demanding newer and high level
innovations so as to cope up with increasing competition.
However HUL is well equipped with all what is needed of this
Indian Giant.
Thank you!!