MUMBAI, February 12: Niall Fitzerald, 48, is the youngest chairman of Unilever Plc. Morris Tabaksblat is well into his 50s and is the chairman of Unilever NV. Fitzerald is full of Irish spark, and Tabaksblat epitomises the Dutch resolve. That's where the difference ends. Both want Unilever's Indian operations to contribute around 10 per cent of Unilever's $52-billion global turnover. Hindustan Lever is more than ready to deliver its chairmen's dream.The merger of Pond's and the takeover of Lakme are not startling revelations. In fact, they were almost expected. What's startling is the speed with which Lever has moved. In about two years from the date of former chairman Susim Mukul Datta's trailblazing announcement of the HLL and Brooke Bond Lipton merger in 1996, Keki Dadiseth has put the final pin in place. Pond's is a part of HLL, and Lakme has become a 100 per cent subsidiary. The building of HLL, the megacorp, is temporarily complete.In a period spanning eight years, Unilever's Indian operations havecome together to form a truly diversified fast-moving consumer goods company with interests ranging from soaps and detergents to personal products and beverages to ice-creams. All synergies are in place. The marketing functions are unified, costs are under control and the stage is set for a new onslaught. As a huge marketing megalith, HLL is ready to push forward driven by its own engine of growth and phenomenal cash-flow systems. It's a powerhouse that competitors cannot wish away, distributors ignore and retailers act pricey about. It has changed the rules of the game. HLL calls the shots, the market listens.
This is not to say the picture is perfect. Far from it. The much talked-about foods business is yet to take wings, the chemicals and fertiliser business are not adding a great deal of pep to the bottomline and labour issues cropping out of the Tomco acquistion continues to rankle. Given the glitches, the company has still been able to maintain an enviable growth rate and shown that the leader must bepro-active, a quality that has kept it ahead of its rival and at times helped to close the gap with competitors like Colgate.
At a time when the Raj vs Swaraj debate has acquired new dimensions, HLL has made the most of Manmohan Singh's liberation dream. With a sense of quiet aggression, HLL has built up a Rs 8,500-crore empire. It all began in the early 90s with the merger of Doom Dooma Tea Estate and the subsequent creation of Brooke Bond Lipton India. The horrors of the paper and motorcycle businesses were put aside and foods became the new mantra. A slew of acquisitions followed, including the famed Kissan brand from the Mallyas. Brooke Bond became a name to reckon with in the foods sector, but even as ice-cream sales touched new highs, the bottomline was not exactly inspiring, at least compared with HLL. While much of the acquisition was a part of BBLIL's growth strategy, HLL was not sitting quiet. In 1993, it acquired Tomco and in 1996 struck a deal with Lakme. Strategically brilliant moves. Tomcoexpanded the base of the soaps and detergents business, and Lakme added the top of the line women's cosmetic range. More importantly, it created a distribution network for Unilever to introduce some of its coveted and yet niche market range like Elizabeth Arden. The merger with with BBLIL had a broader sweep. It was a corporate decision rather than marketing. The excess cash flow of HLL could be used to fuel the business of BBLIL and there were opportunities for rationalising several back room operations.
The merger with Pond's is more a matter of common sense. With the shift on personal products industry distinctly visible, Pond's adds to the HLL armoury a range of products that is completely complementary to its portfolio. With Lakme and Pond's in the, fold HLL's personal care products portfolio has it all. The question is, what next?
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
