GROUP - 8

FMCG Sector : Overview

l The Indian FMCG sector is the fourth largest sector
in the economy.


l The FMCG sector has registered a growth rate of

16 per cent for the year 2009-10.


l By 2012 it is expected to grow by more than 25 %

in rural and semi-urban India
l
 Heritage
l In the summer of 1888, visitors to the Kolkata harbour
noticed crates full of Sunlight soap bars, embossed with
the words "Made in England by Lever Brothers". With it,
began an era of marketing branded Fast Moving
Consumer Goods (FMCG).
l
l Soon after followed Lifebuoy soap in 1895 and other
famous brands like Pears, Lux and Vim.


l Vanaspati ghee was launched in 1918 and became the

famous brand Dalda.
l
 Brief History
l On November 27th 1931, Unilever set up its first Indian
subsidiary of ‘Hindustan Vanaspati Manufacturing Co.’


l ‘Lever brothers India Ltd.’ Incorporated on October 17th

1933.
l
l ‘United Traders Limited’ incorporated on May 11th 1935.


l In 1956, Three companies merged to form ‘Hindustan Lever

Limited’, with 10% Indian equity participation.


l July 19th 2007, changed the name to Hindustan Unilever

Limited.
l
 Current Scenario
l India's largest fast moving consumer goods company.


l BSE Ticker:500696 and is head quartered in Mumbai



l It employs 65000 people directly and indirectly

l
l It earned USD 3.98 Billion for FY 2009-10.


l It’s distribution covers over 1 million retail outlets across

India directly and its products are available in over 6.3
million outlets in the country
l
l
 Board of Directors
The Board of Directors (the Board) is entrusted with:
1)The ultimate responsibility of the management
2)General affairs,
3)Direction and performance of the Company
4)And vested with the requisite powers, authorities and duties.
Mr. H. Manwani joined the Company in 1976. He joined the
Board of the Company in 1995, as a Director responsible for
the Personal Products business

Mr. Paranjape worked as Area Sales Manager – Detergents

and then Product Manager-Detergents.

Mr. R. Sridhar is CFO, he is a Commerce

graduate from R. A. Poddar College, Mumbai. He
joined the Company in May 1989 and worked in
a number of finance and commercial functions
 Management Committee
The day-to-day management of affairs of the Company is vested with
the Management Committee which is subjected to the overall
superintendence and control of the Board. It comprises of 8 members
and is headed by Mr. Nitin Paranjape

Mr. Shreejit Mishra- Executive Director, Home & Personal Care

Ms. Leena Nair- Executive Director, Human resource

Ms. Dev Bajpai- Executive Director, Legal and

Company Secretary
Distribution at Villages…

RURAL DISTRIBUTION MODEL

New Distribution Channels…
Shakti - Operations
HUL’s Turnover Vs Competitors
Market Leadership in FMCG
categories
Competitors
 Corporate Social Responsibility
l Member of UN Global Compact Program which covers human rights,
labor practices, environment commitment and prevention of
corruption in the organization


l CSR areas include community welfare, Disaster relief, Education,

Employee welfare, Girl child, Healthcare, poverty eradication,
rural development, vocational training, water, women.
l
l Karamyog, an NGO, has given HUL 2/5 in its CSR Ratings for 2009.


l No Trust/Foundation established for CSR

l
l
 CSR Activities undertaken
l 3 main CSR activities concern water, healthcare & enhancement of
livelihood.


l Rain water harvesting and soil conservation projects around

Silvassa, Dadra & Nagra Haveli, Maharashtra.


l Lifebuoy has been conducting a sustained health education program

to raise hygiene standards in rural communities.
l
l In 2008, HUL employees volunteered more than 40,000 hrs of
social work
 Project Shakti
l “Doing well by doing good”
l It is a rural initiative that targets small villages
typically with a population of less than 5000.
l It empowers women in rural markets while
contributing well as a sales channel
l Objectives of Shakti project
l Reach new consumers in small rural villages
l Grow markets through consumer education program
l Empower women through creation of employment
opportunities for them
l Build a sustainable business model
l


 Operational efficiency
l Reduced water usage per tonne by more
than 26% in its manufacturing operations
since 2004
l Energy consumption per unit of production
has come down by 34% since 2004
l Exceeded the target of 25% reduction in
CO2 in manufacturing operations per
tonne of production against a baseline of
2004
l
Corporate governance@ HUL
l
l Two basic tenets of corporate governance @ HUL
1. Transparency
2. Accountability


l HUL's highest executive body- Unilever

Executive.
Directors’ Shareholding
Composition & directorships/Committee
membership
Attendance of the Members at Shareholders /
Inventors Grievance Committee Meetings
Details of Shareholders / Investors
Complaints received and redressed
 Committees & Policies

l COMMITTEES:
1) Share Transfer/ Transmission Committee
2) Committee for Allotment of Shares under ESOPs
l COMPANY POLICIES:
1) Preventing Conflict of Interests
2) Whistle Blower Policy
3) Share Dealing Code
4) Affirmation And Disclosure
5) Disclosure Of Pending Cases / Instances Of Non-Compliance
6) Compliance With The Governance Framework
7) Compliance with Sarbanes–Oxley Act
l
Trend of Complaints Received During
Last 5 Years:
 Controversies
l In 2001 HUL was accused for dumping of glass
contaminated with mercury in municipal dumps.
l

Empty mercury bottles Unilever's mercury tainted

found in the watershed glass was found at this
forests behind the crowded scrap yard in
Unilever factory. Kodaikanal, India
 Controversies
l Fair and lovely 2007
ad’s- skin lightning
cream in India-
Racism
l
l HUL is using Triclosanin
the products which is
still under testing
phase by FDA,
America
l
 Rin V/S Tide
l Rin started “Safedi ki chamkaar”
advertising
Recommendations