Hindustan Lever Ltd’s (HLL) three-pronged growth strategy to fight slowdown has made good progress in the last 18 months, with it’s FMCG (fast-moving consumer goods) share of the business moving up from 75 per cent to about 90 per cent.
HLL has, in the last couple of years, put in a new strategy to deal with the changing environment. The three-pronged strategy consists of its focus on its 30 power brands, its thrust to improve profitability of these brands, and its plan to secure value for its non-FMCG businesses by protecting the long-term interest.
HLL had reported an 8.8 per cent decline in sales in the second quarter ended June 30, 2002 to Rs 2,671.57 crore from Rs 2,931.25 crore in the corresponding quarter last year, mainly on account of certain divestitures.
In addition to the seeds business disposal, the company completed the disposal of the Diversey Lever business, while the leather exports business has been transferred to a subsidiary (Pond’s Exports Ltd) and the mushroom exports business has been transferred to KICM (Madras) Ltd for potential JV/divestment.
According to sources the company expects to accomplish the task of divesting non-FMCG businesses in the next 12 months.
The Rs 10,971.90-crore FMCG major draws a large part of its turnover from soaps and detergents (Rs 4,284.76 crore in 2001), followed by personal products (Rs 2,212.08 crore), beverages (Rs 1,414.27 crore) and foods (Rs 794.20 crore). It markets leading brands like Lux, Lifebuoy, Pond’s, Lakme, Clinic, Surf, Wheel, Kissan Annapurna, Brooke Bond, among others.