The Hindu Business Line : HLL to focus on topline growth

HINDUSTAN Lever Ltd (HLL), faced with flat sales growth and higher input costs, has said that its key agenda going forward will be to drive topline growth.

"We are focused on brand relevance and strategic pricing. With brand rationalisation and food restructuring behind us we will be focusing on the growing market,'' Mr D. Sundaram, Director-Finance, said.

The FMCG major's optimisim is on the back of an upturn in the FMCG market. "We are seeing a growing market. The upturn is possibly because of the action players in this segment have taken by investing heavily in upgrading value of products,'' Mr M.S. Banga, Chairman, HLL, said.

The company has taken up upgradation of its product formulation along with aggressive pricing moves, to forge ahead. "We are beginning to see the bite of the good rural economy,'' he said.

Spending on consumer goods was impacted in the last three years by a number of issues; primarily by lowering of interest costs taking consumer attention to otherwise unaffordable consumer durables.

He believes that the average category growth will be at double digits going forward. The recently launched water purifier Pureit is expected to open up a huge potential. This product will tackle 90 per cent of the market opportunity in that space.

The company continues to maintain that input costs would impact margins especially in the laundry segment where the costs of inputs such as chemicals and packaging material have been going up. "The margin structure in laundry is unrealistic for everybody,'' Mr Sundaram said.

HLL is focussing on all its brands. "However, our brands in HPC (Home & Personal Care) are better developed than those in the foods division. But there is opportunity to drive growth in foods and beverages,'' Mr Banga said.

In its foods division, HLL plans to look at new categories and rework some of its earlier launches, which were withdrawn. It has revamped the supply chain for its foods business. It has also set up a shared service hub for planning, sourcing and production scheduling to ensure inventory management. This will ensure that the products are fresh, Mr Sundaram said.

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