Hindustan Lever Ltd (HLL) is looking into the possibility of extending the Alphos technology — which will enable it to cut down costs involved in soap making, and thus curtail prices — to its largest selling soap brand, Lifebuoy.
Alphos, a breakthrough technology, was earlier applied to Breeze. However, sources said the technology will have to be first tested on Lifebuoy to gauge the consumer response. Further, the sources said it could take HLL around two years of testing the technology to arrive at a decision on whether Alphos can be applied to other soaps like Lifebuoy.
HLL has already got a patent on the Alphos technology. Technological breakthroughs will be critical for a company like HLL to offer better products to consumers in a highly competitive environment.
It will also help withstand the vagaries of price fluctuations. Alphos is a substitute for oil-based soaps. Toilet soap-makers depend on import of oils which is a critical raw material for soaps. With frequent fluctuations in the oil prices, this forms one of the key elements that determine the maximum retail price (MRP) of the product.
Application of this technology will make HLL more price-competitive. At a recent analysts’ meet, HLL chairman MS Banga said: “We recognise the challenge of intensified competition from both low-priced players as well as international companies.”
Mr Banga said the company is prepared to make investments because of its belief in the long-term growth opportunity of the Indian market through increasing consumption levels and penetration. “We have significantly improved quality by investing over Rs 400 crore in the last three years. Secondly, we have re-priced several of our brands at lower levels with key price points as appropriate, especially in laundry, hair, tea, toothpaste and ice-cream. Thirdly, our brand equities as measured by standard tracking techniques are stronger than ever,” Mr Banga added.