CEO FitzGerald reiterates importance of Indian arm

‘Local jewel’ HLL Fitz well into Unilever crown

Our Bureau

Mumbai, Dec 6: For Niall WA FitzGerald, chairman and CEO of Anglo-Dutch consumer products major Unilever plc, India and Unilever’s over 51 per cent Indian subsidiary Hindustan Lever Ltd (HLL), form an integral part of the overall gameplan Unilever has lined up for itself — a plan, which is already eight quarters into being implemented.

Labelled “Path to Growth” and unveiled in February 2000, the plan will eventually see Unilever with fewer, but more focused, global brands; a clutch of high-growth “local jewels” (Leverese for country-specific major brands like Kissan in India) and with fewer positions and factories worldwide.

India is one of Unilever’s favoured countries for its worldwide operations, as it has a huge market with a burgeoning middle class just beginning to realise the power of spending, and will shortly be the launching ground of at least two key Unilever brands in foods and personal care segments. While HLL already contributes close to 5 per cent of Unilever’s global turnover, Mr FitzGerald sees this figure growing rapidly in the next few years. In fact, India is also a major pool from which Mr FitzGerald, a self-proclaimed “plunderer of talent”, sources its global skill base. Other countries which are Unilever favourites in terms of talent are, Ireland (which has sent two CEOs to the company, Mr FitzGerald himself being the second), Holland, UK, France and Germany.

In a meeting with select mediapersons during his visit to Mumbai, where HLL is headquartered, Mr FitzGerald, whose CV says he plays “poor golf and runs slowly”, makes it clear that there’s little about HLL which he would like being done differently. Already, much of HLL’s own restructuring, in line with Unilever’s global strategy, is in place, and, HLL chairman MS “Vindi” Banga also points out that restructuring expenditure is expected to further taper off in the coming days for the Indian company as the plans near fruition.

Besides, Mr FitzGerald emphasises he is “happy with the Indian shareholding pattern of HLL” and says the fact that HLL is often seen as an Indian company with strong international connections is a cause for satisfaction.

Mr FitzGerald, who heads a conglomerate celebrated for the power of its brands and its understanding of the consumer psyche, says India can achieve a sustainable growth rate of 6 to 7 per cent “if you get agriculture moving.” He dismisses any talk of swadeshi sentiment leading to a possible curtailment of HLL’s initiatives to aggressively push its brands. If anything, more of Unilever’s international brands will find their way into India. On the cards are the “yellowing of India” by way of the Indian launch of Lipton ice teas and the full range of Dove, the well-known Unilever personal care brand. Says Mr FitzGerald, “We will be painting the country yellow over the next five years with the launch of Lipton iced teas. This business is built out of our tea business and has huge potential”. The Unilever chief says emerging consumer trends show there is a much greater focus these days among people to “eat nutritiously and for better general hygiene of the surroundings”. The iced teas launch will cater to this kind of aspiration.

On Dove, he says apart from the basic soap, skin creams, shampoos and deodorant variants of the brand would find their way into Indian markets shortly. “It’s important to establish the basic franchise of Dove as a moisturiser first, and then to introduce the entire line. The brand will become a $2 billion one by next year,” he says.

So, even as Vindi Banga focuses on his 30 power brands, Unilever’s doing the same on a much wider scale. From 1,600, Unilever’s total portfolio of brandnames is currently at about 800 and will go down further in the rationalising exercise to 400 brandnames, translating into about 200 brands eventually. Alongside, there would be about 125-150 “local jewels” in various countries. In its “path to growth” exercise, Unilever, Mr FitzGerald says, is already ahead of most targets in terms of topline, leading brands and targets. Following the acquisition of Bestfoods worldwide, the plan now is to cut down on 33,000 positions across the company and reduce 130 factories.