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– Paul Noronha

Mr Harish Manwani (centre), Chairman, Hindustan Unilever Ltd, Mr D. Sundaram (right), Vice-Chairman, and Mr Ashok K. Gupta, Executive Director (legal), at the company’s AGM in Mumbai on Friday.

Our Bureau

Mumbai, July 3 Waging a war on costs is Hindustan Unilever’s agenda in times of an economic downturn.

Speaking at the company’s 76th AGM, Mr Harish Manwani, Chairman, HUL, said, “It will be business as usual on growth, but business unusual on costs. We will be conservative with our capital expenditure and keep it under control, but will spend it only to get growth.”

Highlighting the challenges faced by the business in these ‘turbulent’ times, Mr Manwani added, “a responsible business must ensure that while it continues to invest in growth, it is simultaneously reshaping the cost structure for the worst-case scenario, that is business unusual on costs.”

Meanwhile having raised prices in the past due to an increase in raw material prices, HUL is now in the process of bringing them down. “We have begun to rationalise prices in many of our businesses as we had to hike them due to raw material costs increasing. However, cost efficiencies have to be maintained and we are monitoring our market shares,” said Mr Manwani.

With 35 brands and 1,200 SKUs (stock keeping units), HUL also plans to rationalise the number of SKUs in its portfolio. “We are reviewing the number of SKUs and the need to rationalise them. However, consumers prefer to have rounded numbers for the key price points and grammages,” added Mr Manwani.

With new businesses such as Pureit (an in-home drinking water purification system) gaining ground, HUL has gone national — with its brand reaching 700 towns, selling one million units and achieving a sales turnover of Rs 190 crore between April 2008 and March 2009.

However, there are still no plans to launch this service across other Unilever markets. “The business is still in the investment phase and we continue to commit resources behind it mainly to fund brand development and sales infrastructure. The potential for the business is high given the critical need for clean water at low cost,” said the company.

Pureit has been launched on a pilot basis through the company’s rural initiative — Project Shakti. The ‘Shakti ammas’ would offer would offer Pureit water purifiers to households in their villages at an affordable price.

Besides, HUL would launch or re-launch two of its brands every quarter. For instance last year it had 30 new brand launches and re-launches. Recently it re-launched its largest selling soap brand Lifebuoy. ‘Doing well by doing good’ was the motto of its recently concluded AGM.

More Stories on : Outlook | Branding | Personal Products | Hindustan Unilever Ltd

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