Hindustan Unilever

Hindustan Unilever History, Future Prospects, Basic Financial Details, Brands Of Business and Swot Analysis.

A Project By Hardik Dave Roll No.: 30

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TABLE OF CONTENT

Sl.no 1. 2. 3. 4.

Content Executive summary Introduction Objectives and Methodology Findings Product Line SWOT Analysis Competitors Analysis Performance Analysis Future Opportunities Future Projects of HUL Results For Sept Quarter 2011 Conclusion Bibliography

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EXECUTIVE SUMMARY

Hindustan Unilever Limited is the Indian arm of the Anglo-Dutch company Unilever. Both Unilever and HUL have established themselves well in the Fast Moving Consumer Goods (FMCG) category. In India, the company offers many households brands like, Dove,Lifebuoy, Lipton,Lux, Pepsodent, Ponds, Rexona, Sunsilk, Surf, Vaseli ne etc. Some of its efforts were also rewarded when four of HUL brands found place in the Top 10 brands list for the year 2008 published in The Economic Times. Unilever was a result of the merger between the Dutch margarine company, Margarine Unie, and the British soap-maker, Lever Brothers, way back in 1930. For 70 years, Unilever was the undisputed market leader but now faces tough competition from Proctor & Gamble and Colgate-Palmolive. HUL is also known for its strong distribution network in India. In order to further strengthen its distribution in the rural areas and to empower the local women, HUL launched a project Shakti in 2000 in a district in Andhra Pradesh. The idea behind this project was to create women entrepreneurs and provide them with micro-credit and training in enterprise management, which would enable them to create selfhelp groups and become direct-to-home distributors of HUL products. Today Shakti is present across 80,000 villages in 15 states and is helping many underprivileged women earn their livelihood. As thepercapitaincome of India increasing along with the Indian population. So, the future for the FMCG Companies is bright. To analysis the past performance & the future demand of HUL, FMCG products we have considered following points: We have a listed the different FMCG product lines of HUL.We have done competitors analysis in which the market share of top FMCG companies are analayised& the market share of HULS different categories product are analayised with comparison to its competitors. Then we have done SWOT analysis to know the threat & opportunities of HUL in present market.

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Then performance analysis is made by taking 10 year financial data from 1998-2007. The profit & sales growth is analysed. Then the future opportunities for FMCG products are taken into consideration by analyzing the increased percapita income & increased disposable income to forecast the future demand of HUL.

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INTRODUCTION

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited, is INDIAs largest consumer products company and was formed in 1933 as Lever Brothers India Limited. It is currently headquartered in Mumbai, India and its 41,000 employees are headed by Harish Manwani, the non-executive chairman of the board. HUL is the market leader in Indian products such as tea, soaps, detergents, as its products have become daily household name in India. The Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever Limited. The company was renamed in late June 2007 as "Hindustan Unilever Limited". Some of its brands include Kwality Wall's ice cream, 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 & Lovely creams, Lakme beauty products, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim dish wash, Ala bleach and Domexdisinfectant,Rexona,Modern Bread and Axe deospray.HUL has produced many business leaders for corporate India. It is referred to as a CEO Factory' in the Indian press for the same reasons. Its leadership building potential was recognized when it was ranked 4th in the HewiitGlobal Leadership Survey 2007 with only GE, P&G and Nokia ranking ahead of HUL in the ability to produce leaders with such regularity Today, HUL is one of Indias largest exporters of branded Fast Moving Consumer Goods. It has been recognized by the Government of India as a Golden SuperStarTradingHouse. Over time HUL has developed into a viable & competitive sourcing base for Unilever world wide in Home and Personal Care & Foods & Beverages category of products. HUL is also a global marketing arm for select licensed Unilever brands and also works on building categories with core country advantage such as brandedbasmatirice.

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HUL Exports offers high level of service with flexibility and responsiveness thorough out the supply chain. It has a dedicated organization structure to support this endeavor and this has helped in growth of these businesses in particular. Intrinsic cost competitiveness in the end to end Supply chain with appropriate technology and competitive capital investment operations while delivering best in class quality enables HUL to position itself as a key sourcing hub for Unilever and also become a preferred partner for Global customers in categories we operate. HULs key focus in the exports business is on two broad categories. It is a sourcing base for Unilever brands in Home & Personal Care (HPC) and Food and Beverages (F&B) for supplies to other Unilever companies. It also focuses on becoming a preferred supplier to both non-Unilever and Unilever clients in three categories in which India, as a country, has competitive advantage Branded Rice, Marine Products and Castor and its Derivatives. HUL enjoys international recognition within Unilever and outside for its quality, reliability and speed of customer service. HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle East, Africa, Australia, and North America etc.

HULs products touches two out of three Indian everyday Reach 80% Households Direct Coverage of 1mln outlets 2000 Suppliers and Associates 71 Manufacturing locations 15000 Employees 1100 managers Shelf availability 84% outlets in India

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OBJECTIVES AND METHODOLOGY

OBJECTIVE Primary objective To find the past sale growth and demand analysis Secondary Objective Market structure analysis SWOT analysis Competitor analysis Performance evaluation

Methodology In this project we have followed descriptive method of study. Research instrument Here project analysis is made by collecting secondary data from different websites, journals, etc. Secondary datas are pre published and research datas collected from different websites, journals, newspapers, company research papers. These documents and datas are very useful for the theoretical, conceptual and organizational background analysis. Detailed analysis of datas is made by plotting different graphs and tables which can be easily understandable. Then by observing these graphs we have made our conclusions and recommendations.

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PRODUCT LINE
A) HOME AND PERSONAL CARE: 1) Personal wash Lux Lifebuoy Liril Hamam 2) Laundry Surf Excel Rin Wheel 4) Hair care Sunsilk naturals Clinic 6) Deodorants Axe Rexona Breeze Dove Pears Rexona 3) Skin Care Fair and lovely Ponds Aviance 5) Oral care Pepsodent Close up 7)Colour Cosmetics Lakme

8)Ayurvedic Personal and health care:Ayush B) FOODS 1) Tea Brooke Bond Lipton 2) Coffee Brooke Bond Bru 3) Foods 4) Ice cream Kissan Kwality walls Knor Annapurna

C) WATER PURIFIER Pureit

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SWOT ANALYSIS
STRENGTH Variety of products Distribution Network Brand image Quality Management Innovation and R&D strength

THREATS From High Class Competitor Proctor & Gamble Pantene Dabur Babool Dabourlal Dent Manjan Reckitt Benckiser Dettol Palmolive Colgate Nirma

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OPPORTUNITIES Huge Market Increasing per capital income Increasing consumption pattern Potential for making more impact of brand image. Coming in technology e.g. in water purifiers

WEAKNESS Not able to compete with local competitor in the rural market Not focus on upper class population Pricing policy is not good

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COMPETITORS ANALYSIS
According to the market survey done by BUSINESS TODAY the top 10 companies of FMCG sector are given below.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Hindustan Unilever Ltd. ITC (Indian Tobacco Company) Nestl India GCMMF (AMUL) Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries

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THE COMPARATIVE DATA OF % MARKET SHARE OF HUL AND ITS COMPETITOR INQUARTER ENDED JUN08

(Above graph showing %age Market share of HUL and its competitor in different categories of FMCG products) As mentioned in the above graph, HUL is enjoying the leader position in the market and is having highest market shares which are followed by the market challengers like Dabur India Ltd, Nestle India Ltd, and ITC LTD, ETC..In different categories of FMCG products likeshampoo, skincare , deo, jams, coffee, etc

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In some category these market challengers are giving high level competition in different product lines such as ketchup and toothpaste (As shown in the graph below).

(Above graph showing the two category of products in which HUL percentage market share is less than its competitor in Quarter ended JUN08)

So we can see that in overall FMCG business HUL is distantly ahead of rest of the companies as far as market share of different products are concerned.

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In the above pie chart we see the position of various FMCG companies doing business in India. We can see that HUL is enjoying the position of market leader and is followed by ITC as close second in the market share of FMCG products.

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PERFORMANCE ANALYSIS
Hindustan Unilever Ltd is one of the leading FMCG company in India which having the following past financial records we have taken for the analysis as follows: Table showing past 10 years financial data

Sales growth of last 10 years

1500000 1400000 1300000
1200000 1100000 1000000 900000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

sales(Rs. Lakhs)

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DATA ANALYSIS: We have the sales and profit figures of HUL from the year 1998 to 2007 in the 10year past data from Yr1998-2007, after plotting two graph one of sales & other of profit as shown in here we can see that both profit and sales of the company rose from the year 1998 till 2001, but in the year 2002 we see that the sales fell but there was actually rise in the profit of the company . In the year 2004 we see that there was a steep fall in the profit of the company and from the year 2005 onwards there was a slow but steady rise in the profit of the company, but a rapid rise in the sales of the company in the given years.

Reason for the steep fall in the profit of the company in the year 2004:The FMCG market in Urban India was attaining the saturation level and so companies had to expand its market in rural India. This resulted in the downfall in the profit of HUL. There was very aggressive advertising campaign by ITC in that year to set itself in the market this affected HUL who was enjoying the position of market leader and resulted in the fall in the profit of the company.

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In the following graph we can see thepercentage growth in FMCG sales of HUL from March quarter 07 to March quarter 08.

(Graph showing the FMCG trend through last quarters)

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FUTURE OPPORTUNITIES
India is a fast developing country with a huge population whose per capita income is growing rapidly and there is huge opportunity for FMCG companies.

The opportunities are as follows: Increasing per capita income is driving FMCG growth in India Indias consuming class is growing rapidly Changing consumption pattern: Per capita income of Indian customer is increasing and FMCG products are relatively elastic in nature hence the expected sale should increase.

By the following three graphs(data collected from a research made by govt. of INDIA) we can expect increase future demand of FMCG products, the graphs showing the increasing percapita income, percapita disposable income and population of India respectively are as follows:

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(Above graph showing percapita income of INDIANS through out Yr2000-2008)

As shown in the above graph the percapita income of an INDIAN increased throughout years, and if this trend will continue in future the people can purchase more FMCG products.

(Above graphs showing increased percapita disposable income from Yr20022007)

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(Above graph shows the past population and expected future population rise, data are collected from the research made by govt. of INDIA)Here by the above graphs we can see that there is huge scope for FMCG products and since HUL is the market leader in India hence it can gain the most out of it.

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CATEGORY WISE SALE GROWTH OF FMCG SECTOR OF HUL IN INDIA:

CATEGORY %AGE

Soaps & Detergents Personal Products Ice Cream Processed Foods Beverages Others

19.3 22.4 15.7 13.7 13.6 19.4

(Above graph shows the data of MAR08 Quarter %growth of different products of HUL)

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FUTURE PROJECTS OF HUL:

As competition is increasing day by day,its difficult to maintain the leader position & to further strengthen the distribution network HUL made a project calledproject SHAKTIwhich will serve the following purpose: A) To Reach: Small, scattered settlements and poor infrastructure make distribution difficult. Over 500,000 villages not reached directly by HUL. B)To Communicate: Low literacy hampers effectiveness of print media. Poor media-reach: 500 million Indians lack TV& radio. C) To Influence: Low category penetration, consumption. C) Awareness: Per capita consumption in Unilever categories is 33% of urban level.

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Hindustan Unilever Limited Results for September Quarter 2011

31-10-2011 : Hindustan Unilever Limited (HUL) announced results for the September Quarter 2011. During the quarter, Domestic Consumer business grew at 18.5% with strong underlying volume growth of 9.8%. Growth has been broad based, and ahead of market. All segments have delivered double digit growth for the third consecutive quarter. Soaps and Detergents grew by 21.8%. Growth in Laundry was ahead of market, underpinned by double digit growth in Rin, Surf and Wheel. Vim was relaunched during the quarter with 100 Nimbuon Ki Shakti. Skin Cleansing had one of its strongest quarters with all segments of the portfolio performing well. Lux and Lifebuoy grew in double digits while the premium portfolio registered its 10th consecutive quarter of double digit growth. Lux was relaunched during the quarter with superior product and salient advertising. Personal Products grew by 18.2%. Growth in Skin Care accelerated with Fair & Lovely, Vaseline and Ponds growing in strong double digits. Fair & Lovely has been modernized and is yielding good results. Vaseline and Ponds continue to build segments of future with differentiated benefits and aspirational offerings Vaseline Total Moisture was relaunched with 3 variants and Ponds White Beauty was extended with Naturals range during the quarter. The face washes range was expanded with introduction of Dove Face Wash. Hair and Oral delivered double digit growth amidst heightened competitive intensity. Nourishing Oil care range and Re.1 sachets were introduced under Dove during the quarter to expand the consumer franchise.

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Beverages grew by 14.6%, with all brands delivering double digit growth. New range of flavored and green tea bags was launched under Taj Mahal. Packaged Foods growth at 20.9% was broad based. Kissan range was relaunched with a new brand visual and 100% Real proposition. Knorr Soupy Noodles range was extended with an accessible Rs.5 pack. Kwality Walls continued its strong growth momentum led by innovations and distribution expansion. Pureit continues to expand its portfolio with the latest entry into fast growing RO water purifier segment with Marvella RO. Distribution across modern electronic retail chains is being scaled up and Go to Market integration is expected to be completed by the year end. Inflation and commodity costs continued to be high. Cost pressures were managed dynamically through aggressive savings programmes coupled with judicious pricing. Cost of Goods Sold is up by 340 bps due to high input costs, especially in Soaps & Detergents.The overall competitive intensity remained high and A&P spends at 11.8% of sales was maintained at competitive levels. Brand investment was stepped up in Personal Products, Beverages and Packaged Foods while spends in Soaps and Detergents were recalibrated in line with industry trends.The business continues to focus on driving buying efficiencies, cost saving programmes and return on marketing investments, with good results. Profit before interest and tax (PBIT) grew by 30.1% with PBIT margin being up by 130 bps. Profit after tax but before exceptional items, PAT (bei), grew by 22.3% to Rs. 652 crore during the quarter. Net Profit at Rs.689 crore grew by 21.7%. The Board of Directors have declared an interim dividend of Rs.3.50 per share for the accounting year ending 31st March 2012. Harish Manwani, Chairman commented: Against the backdrop of a challenging environment, we have delivered one of our strongest quarters with topline growth well ahead of the market and improved operating margins. We will continue to leverage consumer insights to deliver winning innovations and maintain relentless focus on execution, cost management and building organizational capabilities for competitive advantage.

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CONCLUSION

Hindustan Unilever ltd. Is a leading FMCG company in India and from last three consecutive years has shown accelerated growth in FMCG portfolio. Customers in India are also spending more in FMCG as their standard of living is growing. HUL has placed itself successfully in the position of market leader in FMCG products. Though there was some downfall in sales and profit of the company in the beginning of this decade but after that HUL has shown considerable rise in both sales and profit. The future of the company is also looking bright as FMCG market in India is still expanding and so we can safely conclude that HUL will be able to secure its number one position in FMCG product.

HUL has also started project SHAKTI that has provided it direct reach to rural market. This may be considered a revolutionary step since the urban market is reaching its saturation level and there is a huge scope exploring rural market. This will also be helpful not only increasing its market share but also fight competition.

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BIBLIOGRAPHY

In order to make this project we have taken the help of the following websites & books:

www.wikipedia.com www.oppapers.com www.hul.co.in www.scribd.com

Besides it various books are also consulted to prepare project report.

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