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Faced with headwinds in the market, India’s largest consumer goods major Hindustan Unilever (HUL) on Monday announced a slew of measures aimed at sharpening its focus on its core business.
This includes plans to divest its stake in the 21-year-old joint venture Kimberly Clark Lever Pvt Ltd, setting up a new ₹1,000-crore plant in Assam and key changes in the management committee
Over the past few quarters, HUL has been shedding some of its non-core businesses including the Modern Bakery brand to Everstone Group’s Nimman Foods and the rice exports business to LT Foods Middle East DMC.
Kimberly Clark Lever, which has brands like Huggies and Kotex, accounts for about ₹250 crore of revenue. The 50:50 joint venture with US-based Kimberly-Clark Cooperation (KCC) was formed in 1995.
“The decision (to exit the JV) is in line with HUL’s objective to focus on its core business. KCC remains committed to building the business for the long term in India and growing in its core categories,” HUL said in a statement.
While it is exiting non-core areas, HUL is also strengthening its primary business. The company is investing ₹1,000 crore for setting up of a new manufacturing unit in Assam. The new unit, to be commissioned in early 2017, will augment the production capacity of personal care products for HUL. The company has an existing facility in Doom Dooma Industrial Estate of Upper Assam where it makes shampoo, skin creams and toothpaste.
“The Government of Assam has been looking at attracting investment into the state by offering favourable policies that encourage and incentivise companies to set up manufacturing units,” the company said in a statement.
The company also announced some key changes in management. It has elevated Srinandan Sundaram, currently Vice-President, skin care, as its Executive Director of Sales and Customer Development.
Sundaram also joins the management committee. The current ED of sales Punit Misra quits the company to pursue other opportunities.
All this comes at a time when the company reported a sluggish 4 per cent growth in net sales during the April-June quarter, compared with 6 per cent growth expectations of analysts.
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