Hindustan Unilever

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Hindustan Unilever Limited

Type	Public company BSE:HUL
Headquarters	Mumbai, India
Industry	Fast Moving Consumer Goods FMCG)
Products	Home & Personal Care, Foods, Water Purifier
Parent	Unilever Plc
Website	www.hul.co.in

Hindustan Unilever Limited (abbreviated to HUL) (BSE: HUL) formerly Hindustan Lever Limited is India’s largest consumer products company and has an annual turnover of over Rs 13,000 crores (calendar year 2007)^[1]. It was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.. It is headquartered in Mumbai, India and has an employee strength of over 15,000 employees and contributes for indirect employment of over 52,000 people. The company was renamed in late June 2007 to “Hindustan Unilever Limited”.

In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Business World, one of India’s leading business magazines ^[2]. The rating was based on a compilation of the magazines annual survey of India’s Most Reputed Companies over the past 25 years. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as Soaps, Tea, Detergents and Shampoos amongst others with over 700 million Indian consumers using its products. It has over 35 brands. Sixteen of HUL’s brands featured in the AC Nielsen-Brand Equity list of 100 Most Trusted Brands Annual Survey (2008) ^[3]. According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands List. It’s a company that has consistently had the largest number of brands in the Top 50 and in the Top 10 (with 4 brands).

Hindustan Unilever distribution covers over 1 million retails outlets across India directly and its products are available in over 6.3 million outlets in India, i.e. nearly 80% of the retail outlets in India. It has 39 factories in the country. Two out of three Indians use the company’s products and HUL products have the largest consumer reach being available in over 80 per cent of consumer homes across India.

The Anglo-Dutch company Unilever owns a majority stake (52%) in Hindustan Unilever Limited. HUL was one of the eight Indian companies to be featured on the Forbes list of World’s Most Reputed companies in 2007 ^[4].

History - Chronology

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about 360,675 individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth process has been accompanied by judicious diversification, always in line with Indian opinions and aspirations.

The liberalisation of the Indian economy, started in 1991, clearly marked an inflexion in HUL's and the Group's growth curve. Removal of the regulatory framework allowed the company to explore every single product and opportunity segment, without any constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1995, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies had significant overlaps in Personal Products, Speciality Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods.

In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports.[1]

Brands

Wheel Detergent ad in rural Nepal area.

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.^[5] Some of its brands include Kwality Wall's ice cream, Knorr(brand)[Soups & Meal Makers]Lifebuoy, Lux, Breeze, Liril, Rexona, Hamam, Moti soaps, Pureit Water Purifier, Lipton tea, Brooke Bond tea, Bru Coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta, Pond's talcs and creams, Vaseline lotions, Fair and Lovely creams, Lakmé beauty products, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim dishwash, Ala bleach and Domex disinfectant.Rexona,Modern Bread and Axe deosprays

Leadership

HUL has produced many business leaders for corporate India, one of these, Manvinder Singh Banga has become a member of Unilever's Executive (UEx). HUL is referred to as a 'CEO Factory' in the Indian press for this reason.^[who?] It's leadership building potential was recognized when it was ranked 4th in the Hewitt Global Leadership Survey 2007 with only GE, P&G and Nokia ranking ahead of HUL in the ability to produce leaders with such regularity.^[6][7][8]

Mission

Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.

Present Stature

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, and estimates that two out of three Indians use its products. It has over 35 factories across India.^[9]

HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India.^{[citation needed]}

The Hindustan Unilever Research Centre (HURC) was set up in 1958, and now has facilities in Mumbai and Bangalore.^[9] HURC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists, many with post-doctoral experience acquired in the US and Europe.^{[citation needed]}

HUL also renders services to the community, focusing on health & hygiene education, empowerment of women, and water management. It is also involved in education and rehabilitation of underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded to national calamities, for instance with relief and rehabilitation after the 2004 tsunami caused devastation in South India.^[9]

In 2001, the company embarked on a programme called Shakti, through which it creates micro-enterprises for rural women. Shakti also includes health and hygiene education through the Shakti Vani Programme, which now covers 15 states in India with over 45,000 women entrepreneurs in 135,000 villages. By the end of 2010, Shakti aims to have 100,000 Shakti entrepreneurs covering 500,000 villages, touching the lives of over 600 million people. HUL is also running a rural health programme, Lifebuoy Swasthya Chetana. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. So far it has reached 120 million people in over 50,000 villages.^[9]

Controversy

Mercury pollution

In 2001 a thermometer factory in Kodaikanal run by Hindustan Unilever was accused of dumping glass contaminated with mercury in municipal dumps, or selling it on to scrap merchants unable to deal with it appropriately.^[10]

Skin lightening creams

Hindustan Unilever was forced to withdraw television advertisements for its women's skin-lightening cream, Fair and Lovely, in 2007. Advertisements depicted depressed, dark-complexioned women, who had been ignored by employers and men, suddenly finding new boyfriends and glamorous careers after the cream had lightened their skin.^[11] In 2008 Hindustan Unilever made former Miss World Priyanka Chopra a brand ambassador for Pond's,^[12] and she then appeared in a mini-series of television commercials for another skin lightening product, White Beauty, alongside Saif Ali Khan and Neha Dhupia; these advertisements were widely criticised for perpetuating racism.^[13]

See also

Hindustan Unilever on Wikinvest

Notes

1) HUL Results 2007 http://www.hul.co.in/investor/investor_services_share_holding.asp

2) Business World Most Respected Company 2007 http://www.businessworld.in/index.php/Surveys/The-Other-7-Shock-And-Awe/Page-2.html

3) Brand Equity Most Trusted Brands http://economictimes.indiatimes.com/News_by_Industry/Nokia_is_Indias_Most_Trusted_Brand/articleshow/3115558.cms

4) Forbes Most Reputed Companies http://www.forbes.com/2006/11/20/leadership-companies-reputation-lead-managing-cx_hc_1120rep_list_3.html

External links

• Official website of Hindustan Unilever Limited
• Official website of Hindustan Lever Pureit
• Official website of Hindustan Lever Network
• Official website of Pears Transparent Soap
• Review of Home Shopping Service from Hindustan Lever Limited
• Hewitt Leadership Survey

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