Hindustan Unilever Ltd - Home Care India

Euromonitor International : Local Company Profile May 2011

Hindustan Unilever Ltd - Home Care

India

List of Contents and Tables

Strategic Direction .................................................................................................................................................. 1 Key Facts ................................................................................................................................................................. 1 Summary 1 Hindustan Unilever Ltd: Key Facts ................................................................................... 1 Summary 2 Hindustan Unilever Ltd: Operational Indicators ................................................................ 1 Company Background ............................................................................................................................................ 1 Production ............................................................................................................................................................... 2 Summary 3 Hindustan Unilever Ltd: Production Statistics 2010*........................................................ 2 Competitive Positioning .......................................................................................................................................... 2 Summary 4 Hindustan Unilever Ltd: Competitive Position 2010 ......................................................... 3

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Hindustan Unilever Ltd - Home Care

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HINDUSTAN UNILEVER LTD

STRATEGIC DIRECTION
With an extremely diverse consumer goods portfolio, Hindustan Unilever (HUL) has a rather strong presence in all major home care categories as well. Despite facing intense competition from rival home care players across categories, it held a commendable lead over them throughout the review period. HULs brands hold the leading position in relatively mature markets such as laundry care and dishwashing in India, thus propelling it to the status of the major player in home care. HUL is expected to be the number one player in laundry care and dishwashing throughout the forecast period. However, in the face of increasing competition, the company will also look to innovate and expand its product portfolio. There may be special emphasis on underdeveloped and high growth categories such as fabric conditioners, surface care and toilet care.

KEY FACTS
Summary 1 Hindustan Unilever Ltd: Key Facts Hindustan Unilever Ltd Unilever House, BD Sawant Marg, Chakala, Andheri (E), Mumbai 400099, India +91 (22) 3983 0000 +91 (22) 2824 9438 www.hul.co.in Packaged foods, non-alcoholic drinks, beauty and personal care, and home care including dishwashing, laundry care, surface care and toilet care
Euromonitor International from company reports, company website

Full name of company: Address: Tel: Fax: www: Activities:

Source:

Summary 2

Hindustan Unilever Ltd: Operational Indicators 2007* 2009* Rs202.4 billion Rs25.0 billion 2010* Rs175.2 billion Rs22.0 billion

Net sales Net profit

Source: Notes:

Rs137.2 billion Rs19.3 billion

Euromonitor International from company research, company reports *FY2007 (January 2007 to December 2007), FY2009 (January 2008 to March 2009), FY2010 (April 2009 to March 2010)

COMPANY BACKGROUND
Instituted in 1956, the company has acquired and merged with many players to evolve into one of the largest FMCG players in India. HUL is a publicly listed company and a subsidiary of the Unilever Group headquartered in the UK. The parent holds a 52% stake in HUL as of December 2010. HUL has a comprehensive coverage of the Indian consumer goods environment. The conglomerate has leading brands for categories within beauty and personal care, hot drinks and home care. Its biggest vertical, soaps and detergents (including personal care soaps, surface care products and laundry detergents), was responsible for 46% of the companys revenues for fiscal year 2010. The company enjoys an extremely dense network of retail outlets that stocks its products. Nationally, this number was over 6.3 million in 2010. HULs project Shakti, which focuses on reaching out to rural households in villages, was taken one step further in 2010. Shaktimaans were added to the initiative: a

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Hindustan Unilever Ltd - Home Care

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group of dedicated village residents who reach out to nearby villages with a population of less than 2,000. With an accelerated recruitment for the project, HUL plans to amplify its village coverage to three times the current number within two years. The growth avenue identified by the company is based on the fact that 70% of households in India reside in rural areas (according to Euromonitor Internationals Countries and Consumers research 2009), which accounted for only 45-50% of HULs top line revenues in fiscal year 2010. In 2010, HUL was planning to buy back some shares to increase its stake and influence on its strategies. This may enable the parent company to exercise its discretionary role and concentrate on product categories where HUL has lost value share in the latter half of the review period. In July 2010, HUL also decided to divest its majority stake in Hindustan Field Services Private to handover the title to its partner in the joint venture, Smollan Group. HUL now holds a 7.7% share of the company. HUL entered the specialised surface cleaner market (ie, surface care excluding household disinfectants) with brand Cif in mid-2009. The cream-based product is priced higher than most surface care brands retailed through non-direct selling channels (eg, Easy-Off Bang, Lizol, Domex and Colin).

PRODUCTION
Indian demand for HULs product portfolio is met through some 37 company-owned and around 150 thirdparty manufacturing facilities spread across India. As is expected due to their commercial influence in their respective geographical regions, Uttar Pradesh (North India), West Bengal (East India) and Maharashtra (West India) house more than four company-owned plants each. HUL exports home care products to many of Unilevers subsidiary companies around the globe. Major contributors to the home and personal care exports business in fiscal year 2010 were Europe, the Middle East and the US. The total value of exports crossed Rs10 billion in fiscal year 2010. The company is not known to be involved in any third party manufacturing. India is a strategically vital market for Unilever on a global level. Contributing around 7-8% of Unilevers global revenues in calendar year 2009, HUL is seen as a growth driver for both regional and global sales. From the organisational point of view, the volume sales generated in the country and similar consumption trends with neighbouring markets have resulted in India being a hub for Unilevers brand and business heads for South or Southeast Asia.
Hindustan Unilever Ltd: Production Statistics 2010* Product Synthetic detergents
Euromonitor International from company research, company reports *Year end March 2010 **includes third party processing

Summary 3 Location India - all

Source: Notes:

Annual production 789,674 tonnes**

COMPETITIVE POSITIONING
As for overall home care in India, HUL was the undisputed leader by value sales in 2010. With brands such as Vim in dishwashing; Rin, Surf, Wheel and Sunlight in laundry care; and Domex in surface care and toilet care, the company captured 32% of total home care retail value sales in 2010. It held a 48% value share in dishwashing and a 39% value share in laundry care. The hefty contribution of dishwashing and laundry care to total home care value sales in India, complemented by the fact that HUL brands enjoy a healthy lead in both categories, present the company with a distinct advantage in the domestic market. HULs share in laundry care and surface care (the latter having a 7% value share in 2010) steadily decreased over the latter part of the review period as new product launches and price wars with competitors have affected the companys domination of these categories. Within laundry care in particular, Procter & Gamble (P&G) brand Tide has been particularly active in positioning itself directly in competition with HUL brands such as Wheel and Rin. As such, the value sales share of HULs brands dropped one

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Hindustan Unilever Ltd - Home Care

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percentage point for both laundry care and overall home care from 2009 to 2010. The companys value share in toilet care increased from 5% in 2009 to 6% in 2010. The hand wash and bar detergents categories, which were dominated by HUL in 2010, are slowly approaching saturation in India as several local and international brands (eg, Ghari) make their presence felt nationally. The same is true for dishwashing, where product penetration in the country is very good compared to other home care categories. However, the company is also foraying into high-growth categories of surface care and toilet care, as it looks to expand its brand portfolio under Domex and Cif. HUL has a home care portfolio that caters to the lower-middle-class households through low-priced products, and also to the middle- and upper-class ones through mid-priced and sporadically premium products. For example, laundry care offerings from HUL are divided into the three price segments by brand: low-priced (Wheel), mid-priced (Rin) and premium (Surf Excel). The company is often involved in ingredient innovations, changed packaging formats and brand relaunches for its home care brands. It is also regularly on the lookout for new and relevant product launches in highgrowth categories in the market.
Hindustan Unilever Ltd: Competitive Position 2010 Value Share 47.7% 39% 6.5% 53.0% 46.0% 52.3% 34.5% 12.0% 6.0% Rank 1 1 3 1 1 1 1 2 3

Summary 4 Product type

Hand dishwashing Laundry care Other laundry boosters Standard powder detergents Concentrated powder detergents Bar detergents Hand wash detergents Household antiseptics/disinfectants Toilet liquids
Source:

Euromonitor International from company reports, company research, trade press (The Financial Express, The Economic Times, The Hindu Business Line), trade interviews

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