75 years of Independence…

FMCG SECTOR FMCG SECTOR>> 4th largest sector in the economy

>> total market share of Rs 450 bn

>> growth of 50% by 2010

>> main players

HUL,ITC, COLGATE-PALMOLIVE,NIRMA

HINDUSTAN UNILEVER LIMITED

• Type Public• Founded 1933• Headquarters Mumbai, India• Key people Harish Manwani Chairman

Douglas Baillie, CEO

• Industry Fast moving consumer goods• Products Home and personal care,food and beverages• Employees 15,000• Parent Anglo-Dutch Co. Unilever

HISTORY

> 1931, Unilever set up its first Indian subsidiary of Hindustan Vanaspati Manufacturing Co.

> 1933, Lever Brothers India Limited > 1935 ,United Traders Limited .> 1956 ,formed Hindustan Lever Limited. > July 19, 2007,changed the name to

Hindustan Unilever Limited

ESTABLISHMENT

ESTABLISHMENT

• Hindustan Unilever Limited (abbreviated to HUL) formerly Hindustan Lever Limited is India's largest consumer products company and was formed in 1933 as Lever Brothers India Limited

HUL>> Largest FMCG Co. in India>> 20 distinct categories # home and personal care products # food and beverages>> manufactured by 40 factories across India>> combined volume of 4 million tonnes>> sales of Rs 10,000 crores>> 51.55% of equity held by parent Co. Unilever>> rest distributed among 380,000 individual shareholders and

financial institutions>> distribution reaches 6.3mn retail outlets and 250 rural

consumers >> Golden super star trading house

POPULAR BRANDS: • BATHING SOAPS: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona

• LAUNDRY ITEMS: Surf Excel, Rin and Wheel • SKIN CARE: Fair & Lovely, Pond’s and Vaseline • HAIR CARE: Sunsilk and Clinic • ORAL CARE: Pepsodent and Close up • DEODORENTS: Axe and Rexona • COSMETICS: Lakme • AYURVEDIC: Ayush • TEA: Brooke Bond and Lipton • COFFEE: Bru • FOOD: Kissan, Annapurna and Knorr • ICE CREAM: Kwality Wall’s

MISSION

>>> to add Vitality to life.

>>> help people feel good, look good and

get more out of life.

MANAGEMENT STRUCTURE> HEADED BY CHAIRMAN

> 5 WHOLE TIME DIRECTORS

> 5 INDEPENDENT NON-EXECUTIVE

DIRECTORS

MANAGEMENT STRUCTURE

Mr.Harish ManwaniChairman

Mr.Douglas BaillieCEO and Managing Director

75 years of Independence…

PRODUCT SECTORS

SECTORS

Detergents

HealthCare

Hair Care

Deodrants

Food

Oral Care

Cosmetics

Soap

PRODUCTS

SOAP BRANDS

• LUX• BREEZE• REXONA• LIRIL• HAMAM• LIFEBOY• DOVE• PEARS

SOAP MARKET 60% Market ShareThe strategy for 2006-07 would be to increase

the market share from existing 60% to 70%. Competitors :GodrejSoap: Cinthol , Shikhakai,

Evita, CintholStrategiesNew product offering i.e. Fair & Lovely soap Share went down from 3.6% to 2.4% 2006-

2007

Surf Excel, Rin,WheelCompetitor - P&G - Ariel and Tide , Nirma STING Policy against Nirma

Market share 2.5% -35%

DETERGENTS

Fair & Lovely, Ponds,VaselineStrategy-BOGOFHLL is the market leader in the shampoo

category with an 50 per cent market shareShampoos-Sunsilk, Clinic plus,Clinic All Clear

PERSONAL CARE SECTOR

Loosing 4.5% market share

Pepsodent,CloseupCompetitor-ColgatePepsodent and CloseUp, grew at 11% Colgate

brand grew at 14% Unilever has a market capitalisation of $95

billion against Colgate's $34 billion. Unilever's annual sales are around $50 billion which is almost four times Colgate's $13 billion.

ORAL CARE SECTOR

Market share 70% TEA:Brook Bond,LiptonCOFFEE: Brook Bond Bru largest brand.Food: Kissan, Annapuna, Knorr-Largest brandIce Creams- Kwality, Amul

FOOD SECTOR

38%

34%

28%

TEA

Coffee

Icecream

05

1015202530

Tea Coffee Icecream

HUL’s market share dropped to 18.6% in volume terms.

Coffee-Nescafe’s share slipping from 31.8% to 23.6%. Coffee Market Share 21%

GROWTH IN THE PRODUCTSGROWTH IN THE PRODUCTS

Penetration %

Growth %

Toilet Soaps

Laundry - NSD

Shampoo

Toothpaste

Skin Creams

5% 10% 15%

Ice-Creams

Tea

Tomato

StaplesDeodorant

Colour Cosmetics

90%

50%

30%

70%

MARKET LEADER

Personal Wash60%

Fabric Wash42%

Household Care62%

Skin Care53%

Hair Care63%

Talcum Powders65%

Branded Tea35%

Ice Creams25%

Jams & Squashes78%

R&G Coffee56%

Branded Staples15%

Branded Salt18%

Cooking Fats & Oils29%

STRONG NUMBER 2

Oral36%

Hair Oils14%

Instant Coffee36%

Ketchup 39%

MARKET POSITION MARKET POSITION

75 years of Independence…

“INDIAN CONSUMER”

• The Indian middle class is prospering with around 70 million households earning anywhere between Rs80,000 and Rs18 lakh per annum. These  comprise 34 per cent of the slightly over 200 million middle class households.

• Indian Consumer is no longer Price Obsessed.• Indian consumer goods market is expected to reach

$400billion by 2010 • Higher disposable incomes, there is money left over for

daily products even after spending on durables

“FMCG Tricks”

• Main reasons for the revival in the FMCG space is that the wallet share of the consumer which was being diverted to aspirational products is now coming back to FMCG products.

• Indian consumer on spending spree. • There is a difference between FMCG and Consumer Durables.

• Provides Optimum balance between maintaining the heritage of the company and the future benefits with the corporate name of Unilever. (February 20, 2007).

• Will be source of considerable strength and synergies to harness Unilever’s global scale and size for the benefit of the Indian business both in domestic and export markets.

• It would also assist in attracting and retaining talent both locally and internationally

Why Name Change ?

“Edge Over Competitors”• Unilever, in its worldwide operations, strives to be a multilocal multinational. Working since 1912.•Reflected national priorities over the years and remained committed towards India.•Large market capitalization and Product Variety.•Good Company policies such as:-

Developing and using relevant technology

Generating productive employmentStimulating industrialization and dispersing its benefitsAdding value to agriculture

Sustaining export performance

• Experimenting and taking aggressive steps.

• Caught in scandal -- whether on excise duty disputes.

• Situation has changed, P/E ratio is greater than HUl.

• E-Choupal

• System driven and conservative manner.

• Closely linked to parent Unilever.

• Profits has decreased even when the market is growing above 10%.

• Project Shakti.

• To distribute their products in remote rural areas through its Project Shakti. (2000).

• Thirty per cent of FMCG business comes from villages with a population less than 2,000

• To reach areas of low access and low market potential. Currently covers all districts of Andhra Pradesh and Karnataka, reaching almost 5,000 villages through 800 self-help groups (SHGs).

• The Shakti model trains women from SHGs to distribute HLL products of daily consumption such as Detergents, Toilet soaps and Shampoos

“Project Shakti”

“Company Profits”

0

1000

2000

3000

4000

5000

6000

7000

Jun,06 Dec,06 Jun,07

Quarter EndingProfits in Million

Source: Company Reports

“Modern Day Scenario”

• For the quarter ending June 2007, HUL has posted a growth of 13%(8%, 2006) in net sales to reach Rs. 34.31 billion. The profits have been even better off, with PAT growing at 24.4% to reach 4.72 billion.

• The company is on a cost cutting spree, with reduced expenditure on advertisement by 2.7%( over 900 million).

• FMCG BSE Index is above 2600 points.• Share Khan has given BUY recommendation for HUl

with CMP of 204.7 having Target price of 290.

“Mergers and Acquisitions”• Amalgamation of new businesses -- Brooke Bond Lipton

India in 1996-97; Pond's India in 1998; and a smaller subsidiary, Industrial Perfumes, in 1999

• 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,

• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994

• 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.

• In1994, the company entered into a strategic alliance with the Kwality Ice-cream Group families and in 1995 the Milk food 100% Ice-cream marketing and distribution rights too were acquired.

• 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 Pasteurized Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports.

Every 2 out of 3 is effected.

Awards

Hindustan Unilever Limited (HUL) was conferred the Commendation Certification for Significant Achievement in HR Excellence by the Confederation of Indian Industry (CII). Mumbai, October 22, 2007: Hindustan Unilever Limited (HUL) was in September 2007 rated among the top four companies globally in a global study of ‘Global Top Companies for Leaders’ by Hewitt Associates in partnership with Fortune magazine and the RBL Group

HLL has been declared a Mini Ratna  by the Government of India . Upgraded in 2006 as a Schedule B Company by the Department of Public Enterprises HINDUSTAN Lever Ltd (HLL) has bagged 20 India Star awards and three Asia Star awards for innovation in packaging concepts and systems.

Source: Times of India

Awards

0200400600800

100012001400160018002000

2002 2003 2004 2005 2006

Net Profit

Profit Trends For Past Five Years

In Rs. Crores

Source: kotaksecurities.com

Future Plans

HLL has drawn up a comprehensive plan to expand its portfolio in the area of Health Care and Contraceptives. Chemicals business (encompassing Flavours, Fragrances and other Specialty Chemicals), as well as several non-FMCG export businesses such as Thermometers and Mushrooms. HLL has been pepping up its rural distribution systems and has launched low unit price variants of its popular brands to draw in new users in the rural areas.

Social Responsibility Hindustan Latex set up the Hindustan Latex Family Planning Promotion Trust (HLFPPT) a not for profit organization, for the purpose of designing and implementing social sector intervention projects, particularly in the area of Reproductive Health, Women Empowerment and HIV prevention and control activities, with the objective of creating planned social change. HLFPPT is today India’s top social marketing organization.

Social Responsibility HLL promises a `Golden Future' for girl child. PROJECT SHAKTI :The objectives of Project Shakti are to create income-generating capabilities for underprivileged rural women by providing a small-scale enterprise opportunity, and to improve rural living standards through health and hygiene awareness.

Future Technology

Third Party Logistics (3PL): 3PL describes businesses that provide one or many of a variety of logistics-related services. Types of services would include public warehousing, contract warehousing, transportation management, distribution management, freight consolidation.

Conclusion

With it’s long and luminous history HUL is India’s true pride. It is a company which the customers in rural as well as urban India relate to. This explains the deep penetration of HUL in Indian market.Past few years trends may be disturbing but there has been multi facets to the decrease in profits. It would be innocent thought to rule out a behemoth of the ranks of HUL.The future for HUL is demanding newer and high level innovations so as to cope up with increasing competition. However HUL is well equipped with all what is needed of this Indian Giant.

Thank you!!