HLL open to core brand acquisitions

HLL open to core brand acquisitions

Author | Source: Business Standard | Wednesday, Dec 06,2006 8:35 AM

HLL open to core brand acquisitions

Hindustan Lever (HLL) is open to further acquisitions which fit in well with its core areas of business.

Unilver Chief Executive Patrick Cescau told reporters here on Tuesday that the company would stick to its core areas of strength while taking a decision on acquisitions.

“I expect the management to learn from past mistakes and never make them again,’’ Cescau said, adding the company was perhaps in too many places which were a little bit away from the core business.

He was referring to some of the past acquisitions (such as Nihar which was sold later to Marico and Tea Estates) which didn’t do well forcing Hidnustan Lever to sell them.

Soon after Cescau’s remarks, Hindustan Lever’s Non-Executive Chairman Harish Manwani clarified that while some of the acquisitions didn’t work, some other did quite well.

“You win some, you lose some,” he said, giving the successful examples of Lakme, Kissan and Kwality. Cescau said Unilever was yet to see improvement in margins despite its huge cost savings plan totalling $1.3 billion because of the surge in input costs.

“We are facing, as other companies, a very strong headwind in cost and inflation is challenging,’’ he said.

The CEO said Unilever had successfully avoided the traditional model of local subsidiaries operating with globally-imposed processes and structures with an army of expatriates taking charge and recycling US products into India.

“One size does not fit all. So localisation is the key,” he said. A reason why Hindustan Lever has launched a lot of hugely successful local products like Kisan thus avoiding the temptation of launching readymade global products in India.

Pointing out that Hindustan Lever had become a role model for many of Unilever’s operations across the world, Cescau said the company believed in doing business responsibly and successfully as they were two sides of the same coin.

That explains Hindustan Lever’s schemes such as Swasthya Chetna and Project Shakti, which confirm the fundamental belief that the health and prosperity of a company’s business is directly connected with the health and prosperity of the communities it serves.

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