Financial Daily from THE HINDU group of publications
Thursday, Sep 19, 2002
`Modern Foods may break even this fiscal'
NEW DELHI, Sept. 18
MODERN Foods Industries Ltd (MFIL), the first state- owned company to be privatised and now under the fold of Hindustan Lever, is likely to break even this fiscal, according to Mr M.S. Banga, Chairman, Hindustan Lever Ltd.
The quarter ended March 2002 saw Modern Foods sales recording a 27 per cent growth over the corresponding quarter in 2001, and the company expects to clock sales of close to Rs 250 crore for the year ending December 2002.
"HLL was the first to participate in the disinvestment process by acquiring the ailing Modern Foods. We are satisfied with the progress Modern Foods has made, with sales having more than doubled,'' Mr Banga said on the sidelines of a conference organised by the CII here on Wednesday.
Besides pushing the main product - bread - Modern Foods is expected to diversify into synergistic products such as jams, cakes and pastries.
Outlining HLL's immediate future strategy, Mr Banga said that confectionery and ayurvedic personal care were the thrust areas identified for fuelling growth.
While the Max ice-cream brand was extended to confectionery last year, HLL recently rolled out Lever Ayush, its ayurvedic personal care brand, in select markets.
Other areas the company was now focusing on were bulk and packaged water and retailing under Project Sangam, Mr Banga said.
Commenting on HLL's 30 power brands, Mr Banga said these had grown significantly over the last few months despite the slump the FMCG sector was facing.
"We have access to technology which enables us to be cost-competitive,'' he said.
However, Mr Banga declined to elaborate on the insider trading controversy, stating that matter was sub judice. "We are confident of our legal and moral position,'' is all he said.
Mr Banga called upon the Government to accelerate the reform process. "The reform process shouldn't be derailed at any cost. It should rather be accelerated as we don't have much time to lose," he said.
`Foreign investors have a moral duty'
EXPRESSING his views about the role of corporates in the development process at the CII Leadership Summit here, Mr M.S. Banga, Chairman, Hindustan Lever Ltd, said that it was the moral duty of the foreign investors to contribute to the GDP growth of the country by driving the growth of the society at large.
"The investors shouldn't merely look at investment opportunities alone," he said.
Mr Banga said that by driving social causes, the corporates will not only be able to establish an image of being socially-responsible, but will also be able to penetrate deeper into the markets.
He mentioned about HLL partnering with the Kerala Government and a few international aid agencies to educate children on the importance of hygiene.
"This initiative will also help to enhance our business, as the entire campaign will increase the awareness of people on hygiene, which in return will step up sales of our soaps," he said.
"That day is not too far away when the consumers will choose a brand based on the company's values," he added.
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