(HUL)HINDUSTAN UNILEVER LIMITEDBy- Ritesh Kumar DwivediIntroduction:-Hindustan Unilever Limited (HUL) is Indias largest fast moving consumer goodscompany, with leadership in Home & Personal Care Products and Foods &Beverages. HULs brands, spread across 20 distinct consumer categories, touch thelives of two out of three Indians. They endow the company with a scale of combinedvolumes of about 4 million tonnes and sales of Rs.13,718 crores.The mission that inspires HULs over 15,000 employees is to "add vitality to life".With 35 Power Brands, HUL meets everyday needs for nutrition, hygiene, andpersonal care with brands that help people feel good, look good and get more out oflife.It is a mission HUL shares with its parent company, Unilever, which holds 52.10%of the equity. A Fortune 500 transnational, Unilever sells Foods and Home andPersonal Care brands in about 100 countries worldwide.
Mission:-Unilevers 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 getmore out of lifeCorporate purpose:-Unilevers mission is to add Vitality to life hygiene, and personal care withbrands that help people feel good, look good and get more out of life.. Wemeet everyday needs for nutrition,Unilevers mission is to add Vitality to life. We meet everyday needs fornutrition, hygiene and personal care with brands that help people feel good,look good and get more out of life.Our deep roots in local cultures and markets around the world give us ourstrong relationship with consumers and are the foundation for our futuregrowth. We will bring our wealth of knowledge and international expertiseto the service of local consumers - a truly multi-local multinational.Our long-term success requires a total commitment to exceptionalstandards of performance and productivity, to working together effectively,and to a willingness to embrace new ideas and learn continuously.To succeed also requires, we believe, the highest standards of corporatebehaviour towards everyone we work with, the communities we touch, andthe environment on which we have an impact.This is our road to sustainable, profitable growth, creating long-term valuefor our shareholders, our people, and our business partners
HERITAGE:-a- Past Milestone:- ( Over 100 years’ link with India)In the summer of 1888, visitors to the Kolkata harbour noticed crates full ofSunlight soap bars, embossed with the words "Made in England by LeverBrothers". With it, began an era of marketing branded Fast MovingConsumer 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 brandcame to the market in 1937.In 1931, Unilever set up its first Indian subsidiary, Hindustan VanaspatiManufacturing Company, followed by Lever Brothers India Limited (1933)and United Traders Limited (1935). These three companies merged to formHUL 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 holds52.10% equity in the company. The rest of the shareholding is distributedamong about 360,675 individual shareholders and financial institutions.The erstwhile Brooke Bonds presence in India dates back to 1900. By 1903,the company had launched Red Label tea in the country. In 1912, BrookeBond & Co. India Limited was formed. Brooke Bond joined the Unilever foldin 1984 through an international acquisition. The erstwhile Liptons linkswith India were forged in 1898. Unilever acquired Lipton in 1972, and in1977 Lipton Tea (India) Limited was incorporated.Ponds (India) Limited had been present in India since 1947. It joined theUnilever fold through an international acquisition of Chesebrough PondsUSA in 1986.Since the very early years, HUL has vigorously responded to the stimulus ofeconomic growth. The growth process has been accompanied by judiciousdiversification, always in line with Indian opinions and aspirations.The liberalisation of the Indian economy, started in 1991, clearly marked aninflexion in HULs and the Groups growth curve. Removal of the regulatoryframework 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 Indias corporatehistory, 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, tomarket Lakmes market-leading cosmetics and other appropriate productsof both the companies. Subsequently in 1998, Lakme Limited sold its brandsto 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 ClarkCorporation in 1994, Kimberly-Clark Lever Ltd, which markets HuggiesDiapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal,Unilever Nepal Limited (UNL), and its factory represents the largestmanufacturing investment in the Himalayan kingdom. The UNL factorymanufactures HULs products like Soaps, Detergents and Personal Productsboth for the domestic market and exports to India.The 1990s also witnessed a string of crucial mergers, acquisitions andalliances on the Foods and Beverages front. In 1992, the erstwhile BrookeBond acquired Kothari General Foods, with significant interests in InstantCoffee. In 1993, it acquired the Kissan business from the UB Group and theDollops Icecream business from Cadbury India.As a measure of backward integration, Tea Estates and Doom Dooma, twoplantation companies of Unilever, were merged with Brooke Bond. Then inJuly 1993, Brooke Bond India and Lipton India merged to form Brooke BondLipton India Limited (BBLIL), enabling greater focus and ensuring synergyin the traditional Beverages business. 1994 witnessed BBLIL launching theWalls range of Frozen Desserts. By the end of the year, the companyentered into a strategic alliance with the Kwality Icecream Group familiesand in 1995 the Milkfood 100% Icecream marketing and distribution rightstoo were acquired.Finally, BBLIL merged with HUL, with effect from January 1, 1996. Theinternal restructuring culminated in the merger of Ponds (India) Limited(PIL) with HUL in 1998. The two companies had significant overlaps inPersonal Products, Speciality Chemicals and Exports businesses, besides acommon distribution system since 1993 for Personal Products. The two alsohad a common management pool and a technology base. The amalgamationwas done to ensure for the Group, benefits from scale economies both indomestic and export markets and enable it to fund investments required foraggressively building new categories.In January 2000, in a historic step, the government decided to award 74 percent equity in Modern Foods to HUL, thereby beginning the divestment ofgovernment equity in public sector undertakings (PSU) to private sectorpartners. HULs entry into Bread is a strategic extension of the companyswheat business. In 2002, HUL acquired the governments remaining stake inModern Foods.
In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeatbusiness of the Amalgam Group of Companies, a leader in value addedMarine Products exports.b- Present Future:- Hindustan Unilever Limited (HUL) is Indias largest Fast Moving ConsumerGoods company, touching the lives of two out of three Indians with over 20 distinctcategories in Home & Personal Care Products and Foods & Beverages. They endowthe company with a scale of combined volumes of about 4 million tonnes and sales ofnearly Rs.13718 crores.HUL is also one of the countrys largest exporters; it has been recognised as aGolden Super Star Trading House by the Government of India.The mission that inspires HULs over 15,000 employees, including over 1,300managers, is to "add vitality to life." HUL meets everyday needs for nutrition,hygiene, and personal care with brands that help people feel good, look good and getmore out of life. It is a mission HUL shares with its parent company, Unilever, whichholds 52.10% of the equity. The rest of the shareholding is distributed among360,675 individual shareholders and financial institutions.HULs brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds,Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna,Kwality Walls – are household names across the country and span many categories -soaps, detergents, personal products, tea, coffee, branded staples, icecream and culinary products. They are manufactured over 40 factoriesacross India. The operations involve over 2,000 suppliers and associates.
HULs distribution network, comprising about 4,000 redistribution stockists,covering 6.3 million retail outlets reaching the entire urban population, andabout 250 million rural consumers.HUL has traditionally been a company, which incorporates latest technologyin all its operations. The Hindustan Unilever Research Centre (HURC) wasset up in 1958, and now has facilities in Mumbai and Bangalore. HURC andthe Global Technology Centres in India have over 200 highly qualifiedscientists and technologists, many with post-doctoral experience acquiredin the US and Europe.HUL believes that an organisations worth is also in the service it renders tothe community. HUL is focusing on health & hygiene education, womenempowerment, and water management. It is also involved in education andrehabilitation of special or underprivileged children, care for the destituteand HIV-positive, and rural development. HUL has also responded in case ofnational calamities / adversities and contributes through various welfaremeasures, most recent being the village built by HUL in earthquake affectedGujarat, and relief & rehabilitation after the Tsunami caused devastation inSouth India.In 2001, the company embarked on an ambitious programme, Shakti.Through Shakti, HUL is creating micro-enterprise opportunities for ruralwomen, thereby improving their livelihood and the standard of living inrural communities. Shakti also includes health and hygiene educationthrough the Shakti Vani Programme, and creating access to relevantinformation through the iShakti community portal. The program now covers15 states in India and has over 45,000 women entrepreneurs in its fold,reaching out to 100,000 plus villages and directly reaching to 150 millionrural consumers. By the end of 2010, Shakti aims to have 100,000 Shaktientrepreneurs covering 500,000 villages, touching the lives of over 600million people.HUL is also running a rural health programme – Lifebuoy Swasthya Chetana.The programme endeavours to induce adoption of hygienic practices amongrural Indians and aims to bring down the incidence of diarrhoea. It hasalready touched 84.6 million people in approximately 43890 villages of 8states. The vision is to make a billion Indians feel safe and secure.If Hindustan Unilever straddles the Indian corporate world, it is because ofbeing single-minded in identifying itself with Indian aspirations and needsin every walk of life.
ORGANIZATION STRUCTURE • Board of Directors:- The Board of Directors of the Company represents an optimum mix ofprofessionalism, knowledge and experience. The total strength of the Boardof Directors of the Company is 10 Directors comprising a Non-ExecutiveChairman, four Executive Directors and five Non-Executive IndependentDirectors. Chair person Mr. Harish Manwani CEO & Managing Director Mr. Nitin Paranjpe ---------- Vice Chairman & CFO Mr. D. Sundara -------------------- Mr. Sanjeev Kakkar (ex. dr. sales &cutomer develp.) -------------------- Mr.Dhaval Buch (executive director supply chain) ---------------------Mr. D. S. Parekh ( board of director) ---------------------Mr. C. K. Prahalad (board of director) ---------------------Mr. A. Narayan (board of director) ---------------------Mr. S. Ramadorai (board of director) ---------------------Mr. R. A. Mashelkar (board of director) ---------------------Mr. Shreejit Mishra (executive director foods) ---------------------Mr. Gopal Vittal (executive director home & personal) ---------------------Mr. Ashok Gupta (executive director legal) ---------------------Ms. Leena Nair (executive director HR)
CODE OF BUSINESS PRINCIPLE:-Introduction:-Unilever has earned a reputation for conducting its business with integrityand with respect for the interests of those our activities can affect. Thisreputation is an asset, just as real as our people and brands.Our first priority is to be a successful business and that means investing forgrowth and balancing short term and long term interests. It also meanscaring about our consumers, employees and shareholders, our businesspartners and the world in which we live.To succeed requires the highest standards of behaviour from all of us. Thegeneral principles contained in this Code set out those standards. Moredetailed guidance tailored to the needs of different countries and companieswill build on these principles as appropriate, but will not include anystandards less rigorous than those contained in this Code.We want this Code to be more than a collection of high soundingstatements. It must have practical value in our day to day business andeach one of us must follow these principles in the spirit as well as the letter.Standard of Conduct:-We conduct our operations with honesty, integrity and openness, and withrespect for the human rights and interests of our employees.We shall similarly respect the legitimate interests of those with whom wehave relationships.Obeying the Law:-Unilever companies and our employees are required to comply with the lawsand regulations of the countries in which we operate.Employees:-Unilever is committed to diversity in a working environment where there ismutual trust and respect and where everyone feels responsible for theperformance and reputation of our company.We will recruit, employ and promote employees on the sole basis of thequalifications and abilities needed for the work to be performed.We are committed to safe and healthy working conditions for all employees.We will not use any form of forced, compulsory or child labour.We are committed to working with employees to develop and enhance eachindividuals skills and capabilities.We respect the dignity of the individual and the right of employees to
freedom of association.We will maintain good communications with employees through companybased information and consultation procedures.Consumers:-Unilever is committed to providing branded products and services whichconsistently offer value in terms of price and quality, and which are safe fortheir intended use. Products and services will be accurately and properlylabelled, advertised and communicated.Shareholders:-Unilever will conduct its operations in accordance with internationallyaccepted principles of good corporate governance. We will provide timely,regular and reliable information on our activities, structure, financialsituation and performance to all shareholders.Business Partners:-Unilever is committed to establishing mutually beneficial relations with oursuppliers, customers and business partners.In our business dealings we expect our business partners to adhere tobusiness principles consistent with our own.Community Involvement:-Unilever strives to be a trusted corporate citizen and, as an integral part ofsociety, to fulfill our responsibilities to the societies and communities inwhich we operate.Public Activities:-Unilever companies are encouraged to promote and defend their legitimatebusiness interests.Unilever will co-operate with governments and other organisations, bothdirectly and through bodies such as trade associations, in the developmentof proposed legislation and other regulations which may affect legitimatebusiness interests.Unilever neither supports political parties nor contributes to the funds ofgroups whose activities are calculated to promote party interests.The Environment:-Unilever is committed to making continuous improvements in themanagement of our environmental impact and to the longer-term goal ofdeveloping a sustainable business.Unilever will work in partnership with others to promote environmentalcare, increase understanding of environmental issues and disseminate goodpractice.
Innovation:-In our scientific innovation to meet consumer needs we will respect theconcerns of our consumers and of society. We will work on the basis ofsound science applying rigorous standards of product safety.Competition:-Unilever believes in vigorous yet fair competition and supports thedevelopment of appropriate competition laws. Unilever companies andemployees will conduct their operations in accordance with the principles offair competition and all applicable regulations.Business Integrity:-Unilever does not give or receive whether directly or indirectly bribes orother improper advantages for business or financial gain. No employee mayoffer give or receive any gift or payment which is, or may be construed asbeing, a bribe. Any demand for, or offer of, a bribe must be rejectedimmediately and reported to management.Unilever accounting records and supporting documents must accuratelydescribe and reflect the nature of the underlying transactions. Noundisclosed or unrecorded account, fund or asset will be established ormaintained.Conflicts of Interests:-All Unilever employees are expected to avoid personal activities andfinancial interests which could conflict with their responsibilities to thecompany.Unilever employees must not seek gain for themselves or others throughmisuse of their positions.Compliance – Monitoring – Reporting:-Compliance with these principles is an essential element in our businesssuccess. The Unilever Board is responsible for ensuring these principles areapplied throughout Unilever.The Group Chief Executive is responsible for implementing these principlesand is supported in this by the Corporate Code Committee comprising theGeneral Counsel, the Joint Secretaries, the Chief Auditor, the SVP HR, theSVP Communications and the Corporate Code Officer, who presentsquarterly reports to the Unilever Executive.Day to day responsibility is delegated to all senior management of theregions, categories, functions and operating companies. They areresponsible for implementing these principles, if necessary through moredetailed guidance tailored to local needs, and are supported in this byRegional Code Committees comprising the Regional General Counseltogether with representatives from all relevant functions and categories.
Assurance of compliance is given and monitored each year. Compliance withthe Code is subject to review by the Board supported by the CorporateResponsibility and Reputation Committee and for financial and accountingissues the Audit Committee.Any breaches of the Code must be reported in accordance with theprocedures specified by the General Counsel. The Board of Unilever will notcriticise management for any loss of business resulting from adherence tothese principles and other mandatory policies and instructions.The Board of Unilever expects employees to bring to their attention, or tothat of senior management, any breach or suspected breach of theseprinciples.Provision has been made for employees to be able to report in confidenceand no employee will suffer as a consequence of doing so.PRINCIPLES OF QUALITY POLICY:-• Putting the safety of our products and our consumers first• Putting consumers and customers at the heart of our business• Quality is a shared responsibility• Building and maintaining excellent systems to ensure the quality andsafety of our productsBRANDS:-Introduction:-Hindustan Unilever Limited (HUL) is Indias largest fast moving consumer goodscompany with leadership in Home & Personal Care Products and Foods &Beverages. HULs brands, spread across 20 distinct consumer categories, touch thelives of two out of three Indians.If Hindustan Unilever straddles the Indian corporate world, it is because of beingsingle-minded in identifying itself with Indian aspirations and needs in every walkof life.HUL is india’s largest marketer of soaps,detergents,and home care products.It hasthe country’s largest personal products business,leading the market inshampoo,skin care products,colour cosmetics and deodorants.HUL is also themarket leader in tea,processed coffee,braned wheat flour,tomato products,ice
cream,soupsjams,and squashes.HUL is also one of the country’s biggest exportersand has been recognized as a GOLDEN SUPER STAR TRADING HOUSE by thegov. of India.HOME AND PERSONAL CARE:-Personal wash:-LUX LIFEBUOY LIRIL HAMAMBREEZE DOVE PEARS REXONALaundry:-SURF EXCEL RIN WHEELSkin care:-FAIR & LOVELY POND’s VASELINE AVIANCEHair Care:-SANSILK NATURALS CLINICOral Care:-PEPSODENT CLOSE-UPDeodorants:-AXE REXONAColour Cosmetics:-LAKMEAurvedic & Health Care:-AYUSH
FOODS:-Tea:-BROOKE BOND LIPTONCoffee:-BROOKE BOND BRUFoods:-KISSAN ANNAPURNA KNORRIce Cream:-KWALITY WALL’SWATER:-PUREITMAJOR COMPETITORS:-The volume of the detergent market in India comprises laundry soaps,syntheticdetergent powders,and bars,which is estimated to be 2.8 million tones per annum.The total market is estimated at a valu of Rs.3,600 crore.The major players in theorganized detergent market are:--------- • HUL • NIRMA • P&GCurrently, Nirma and HUL are close competitors with each controlling a 30% shareof the volume in the detergent market. Nirma is the market leader in the economy
segment.An appreciable part of the detergents and laundry soaps market isoccupied by the unorganized sector.The reason for this is that the market isdominated by asegment, which is not technology intensive and these players are exempt from taxesand also enjoy low distribution cost. Some of the other players in the industry areHenkel Spic, Tata Chemicals, Soap Acme Works, Swastik Surfactants, Hipolin Ltd,and detergents India Ltd.In the premium detergent powder, HUL has over 60% market share and the rest ofthe market is largly controlled by P&G. Nirma’s presence in the premium detergentpowder is relatively lower.Major brands in the premium segment are International Surf Execel, Surf ActiveOxidants, Arial Microshine, Revel Plus, Henko Mega Star, Henkomatic, and HenkoStain Champion. In the mid priced segment the major brands are Arial SuperSoaker, Surf Easy Wash, Rin Power White, JVG Super Wash, Tata ChemicalsShudh, Henkel Spic, Mr. White. The popular detergent segment is dominated by theleading brand Nirma, followed by HUL’s Wheel & OK. Bars are priced lower witha strategy to increase penetration in rural areas. HUL’s Super 555, Sunlight, andOK, and Nirma’s Nirma detergent cake are the leading brands in the laundry soapcategoryWheel is a detergent brand that caters to the laundry needs of the massmarket. It was first launched in the year 1987. Wheel Green is the singlelargest detergent brand in India in terms of market share and value.Wheel Powder:- Wheel is packed with powerful lather that cleans eventough dirt stains on collars and cuffs with ease. It, there fore, cleanseffectively with lesser effort, making a laborious chore like washing lightand easy.Moreover, Wheel does not harm hands or clothes like some otherdetergents, which contain ahigh percentage of soda.Active Wheel:- It is the premium variant of wheel. It gives consumerthe value of three benefits in one. It not only cleans effectively with lesseffort but also keeps the colored clothes looking bright and has a freshfragrance. Active Wheel gives consumers “Quality Clean and Care” at anaffordable price.
Segmentation, positioning, and targeting:- The brand isintended in the popular range segment, which consists of powders sold in forRs 18-22 per kg. The popular segment was founded as a result of the launchand subsequent success of Nirma. Other brands in this segment now areWheel, OK, and Nima. Wheel is positioned as a tough fighter of dirt andoffers value for money. The advertisements always show a sari-clad lady inthe middle-to lower-middle-class setting. Wheel is targeted as the massmarket and at people moving up the economy ladder from the lower-middleto middle class segments.The same positioning with better benefits and avariant called Wheel Active continues.Relative pricing analysis:- Prices(Rs)HUL’s ProductsSurf excel 1 kg 135Surf excel 500 gm 76Surf excel liquid 500 ml 85Surf powder 1 kg 78Surf powder 2 kg 145Surf powder 500 gm 40Competitor’s productsAriel 1 kg 145Ariel 500 gm 82Ariel Powder 200 gm 36Tide powder 1 kg 120Tide powder 500 gm 68Ezee liquid soap 1 kg 99Ezee liquid soap 500 gm 53Henko matic 1 kg 90Henko powder 1 kg 80Henko powder 500 gm 40HUL’s competing productsRin supreme powder 1 kg 75Rin supreme powder 500 gm 36HUL’s mission is to understand what delights its consumers, and then meet thoseexpectations by developing relevant technology. At the heart of this mission is theHindustan Lever Research Centre at Mumbai and Bangalore.HUL has modified its business model to target poor customers in rural areas. Inrural areas, per capita consumption may be low but the total consumption is high.Contrary to popular notions, people in rural areas do have disposable income,typically because they do not have to buy food but grow it themselves on village
farms. HUL has understood the importance of adapting its technology andmarketing to target this segment, which has been traditionally ignored.Distribution Network:-HUL’s distribution network is recognized as one of its key stengths, which helps it toreach out with products across the length and breath of India. The need for a strongdistribution network is imperative, since HUL’s corporate purpose is ‘to meet theevery needs of people every where’. HUL’s products, manufactured across thecountry, are distributed through a network of about 7,000 redistribution stockistscovering about one million retail outlets. The distribution network directly coversthe entire urban population. In addition to the on going commitment to thetraditional grocery trade, HUL is building a special relationship with the small butfast emerging market trade. HUL’s scale enables it to provide superior customerservice including daily servicing, improves their range availability, and reducesinventories.HUL is using the opportunity of interfacing more directly with consumers in thisretail environment through specially designed communication and promotions. Thisis building traffic in to the stores while yielding high growth for the business.An ITpowered system has been implemented to supply stocks to redistribution stockistson a continuous replenishment basis. The objective is to catalyse HUL’s growth byensuring that the right product is available at the right place in right quantities inthe most cost effective manner. For this, stockists have been connected with thecompany through an internet based network, called RSNet, for on line interactionon orders, dipatches, and information sharing and monitoring.Today, the sales system gets to know what HUL stockists have sold to almost amillion outlets across the country on the daily basis.Indirect Coverage:-Under the indirect coverage method, company vans were replaced by vansbelonging to redistribution stockists,which serviced a select group of neighbouringmarkets.Operation Harvest:-The reach of conventional media and, therefore, the awareness of different productsin rural markets is weak.It was also not always feasible for the redistributionstockists to cover all these markets due to high cost involved.Yet, these markets areimportant since growth opportunities are high. Operation Harvest endeavoured tosupplement the role of conventional media in rural India and, in the process, forgerelationships and loyalty with rural consumers. Operation Harvest also involvedconducting product awareness programmes on vans.Cinema Van Operations:-Cinema van operations are funded by the redistribution stockists where films andaudio cassettes with song and dance sequences from popular films are shown toconsumers along with advertisements of HUL product
.Single Distribution Channel:-For rural India, HUL has established a single distribution channel by consolidatingcategories. In a significant move, with long-term benefits, HUL has mounted aninitiative to further increase its rural reach with the help of rural sub stockists.It hasalready appointed 6000 sub stockists.As a result, the distribution network directlycovers about 50,000 villages, reaching about 250 million consumers.Supplier Performance:-Unilever has extensive systems in place to monitor supplier performance on a rangeof issues. Typically, an operating company such as Unilever Indonesia will conduct afull audit of all its suppliers on a rolling programme. The audit covers quality,health, safety, environment, and labour law issues.The audit did not include labourconditions as local laws set high standards for all companies that are effectivelyenforced.