Fernando Fernandez states that HUL CEO and MD Priya Nair’s topmost focus is on ensuring that the company’s portfolio is future-fit and execution is flawless
Highlighting that the Indian business lost a bit of market share to rivals over the past few years, Unilever Global Chief Executive Officer Fernando Fernandez said that the top priority for Hindustan Unilever’s (HUL) Chief Executive Officer and Managing Director Priya Nair is to regain the lost ground.
In a recent Barclays fireside chat, Fernandez noted that Nair’s topmost focus is on ensuring that the company’s portfolio is future-fit. He added that India, which contributes about 16 to 17 per cent of Unilever’s global business, is a long-term competitive advantage and he is very bullish on the country.
“The number one priority of Priya is to ensure that the portfolio is future-fit and the execution is flawless, as it has been in the past. I believe that we lost a bit of our way for a couple of years but I feel we are improving now. I am very, very bullish about India,” he pointed out.
The global CEO added that the Indian unit holds dominant positions across segments in the country, with around 80 per cent share dishwashing and nutrition, 45 per cent in laundry and around 55 per cent in hair care. He also added that in various categories, the company is three to five times the size of its nearest competitor. Fernandez credited the success to the company’s distribution dept and its strategy of having a cost-efficient manufacturing base.
“When China slowed down, we made a conscious decision to make a fortress of our US position. When China slowed down, where companies were going to go, they were going to go to the US and they were going to discover India,” he added, signalling that India’s scale and structural advantages make it central to the company’s global strategy.
McCormick-Unilever Mega Deal
Last week, spice maker McCormick and fast-moving consumer goods major Unilever entered into an agreement to combine McCormick with Unilever’s foods business. This transaction excluded the company’s Indian business. The transaction reflects an enterprise value of USD 44.8 billion for Unilever Foods.
The separation of Unilever Foods will position Unilever as a leading pureplay HPC company, as it will operate across beauty, wellbeing, personal care and home care post-completion.
Under the terms of the agreement and upon closing of the transaction, Unilever and its shareholders are expected to receive shares equating to 65 per cent of the fully diluted combined-company outstanding equity, equivalent to USD 29.1 billion. Unilever will also receive USD 15.7 billion in cash. The deal is aimed at creating a company worth around USD 65 billion.
