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Hindustan Unilever- An FMCG Company

Hindustan Unilever- An FMCG Company

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Hindustan Unilever- An FMCG Company
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lalvanzonline
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Smile Hindustan Unilever- An FMCG Company - November 24th, 2009

1/ Profile – January 2003
Hindustan Lever Limited
Meeting Everyday Needs of People Everywhere
Introduction
Hindustan Lever Limited (HLL) is India's largest fast moving consumer goods company, with
leadership in Home & Personal Care Products and Foods & Beverages. HLL's brands, spread across
20 distinct consumer categories, touch the lives of two out of three Indians. They endow the
company with a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000
crores.
The leading business magazine, Forbes Global, has rated Hindustan Lever as the best consumer
household products company. Far Eastern Economic Review has rated HLL as India’s most
respected company. Asiamoney has rated HLL as one of India’s best managed companies. Leading
national publications, like The Economic Times, Business World, and Business Today have also
rated HLL as one of India’s most respected companies and the number one in Market Value Added
and EVA.
The vision that inspires HLL's 32,400 employees (40,000 including Group Companies), including
about 1,425 managers, is to “meet everyday needs of people everywhere - to anticipate the
aspirations of our consumers and customers and to respond creatively and competitively with
branded products and services which raise the quality of life.” This objective is achieved through
the brands that the company markets.
It is an ethos HLL shares with its parent company, Unilever, which holds 51.55% of the equity. A
Fortune 500 transnational, Unilever sells Foods and Home and Personal Care brands through 300
subsidiary companies in about 100 countries worldwide with products on sale in a further 50.
Business nature
HLL is India's largest marketer of Soaps, Detergents and Home Care products. It has the country’s
largest Personal Products business, leading in Shampoos, Skin Care Products, Colour Cosmetics,
and Deodorants. HLL is also the market leader in Tea, Processed Coffee, branded Wheat Flour,
Tomato Products, Ice cream, Soups, Jams and Squashes.
HLL is also one of the country's biggest exporters and has been recognised as a Golden Super Star
Trading House by the Government of India; it is a net foreign exchange earner. HLL is India's
2/ Profile – January 2003
largest exporter of branded fast moving consumer goods. The company's Exports portfolio includes
HLL's brands of Soaps and Detergents, Personal Products, Home Care Products, Tea and Coffee.
HLL is also driving exports in chosen areas where India has a competitive advantage -- Marine
Products, Basmati Rice, Castor Oil and its Derivatives. It is India's largest exporter of Marine
Products, and one of the largest global players in castor.
Market leading brands
HLL’s brands have become household names. The company’s strategy is to concentrate its
resources on 30 national power brands, and 10 other brands which are strong in certain regions.
The top five brands together account for sales of over Rs.3000 crores. Each of these mega brands
has a potential scale of Rs.1000 crores in the foreseeable future.
Some of the big brands in Soaps and Detergents are Lifebuoy, Lux, Liril, Hamam, Breeze, Dove,
(all soaps), Surf Excel, Surf, Rin, Wheel (the number one detergent brand in India, and HLL's
largest), 501, Sunlight (all detergents). HLL also markets the Vim and Domex range of Home Care
Products.
In the Personal Products business, HLL's Hair Care franchises are Clinic, Sunsilk and Lux
shampoos; the company markets Nihar oil. In Oral Care, the portfolio comprises Close-up and
Pepsodent toothpastes and toothbrushes. In Skin Care, HLL markets Fair & Lovely Skin Cream and
Lotion, the largest selling Skin Care Product in India; a brand developed in India, it is now exported
to over 30 countries. It has been extended as an Ayurvedic cream, an under-eye cream, a soap and a
talc, in line with the strategy to take brands across relevant categories. The other major Skin Care
franchises are Pond’s, Vaseline, Lakme and Pears. In Colour Cosmetics, HLL markets the Lakme
and Elle-18 ranges. In Deodorants, the key brands are Rexona, Axe, Denim and Pond's, while the
Talc brands are Pond's, Liril, Fair & Lovely, Vaseline and Lifebuoy. Axe and Denim are HLL’s
franchises for Men’s toiletries.
HLL has recently launched Lever Ayush Ayurvedic Health & Personal Care Products. Health Care
is among the new businesses HLL has chosen to enter. The product range comprises Cough
Naashak Syrup, Headache Naashak Roll-on, Dandruff Naashak Shampoo, Hair Rakshak Oil and
Body Rakshak Soap. The purity of the Ayurvedic ingredients in Lever Ayush is endorsed by the
renowned Arya Vaidya Pharmacy (AVP) of Coimbatore. It is for the first time that rigorous
testing procedures of the pharmaceutical industry have been applied to Ayurvedic products. That
is why the brand seal is ‘Truth of Ayurveda; Proof of Science’.
HLL has started franchised Lakme Beauty Salons, offering standardised services, in line with the
strategy to add a service dimension to relevant brands.
The company has set up the Hindustan Lever Network, a direct selling channel, offering the Lever
Home range of Laundry and Home Care products and the Aviance Personal Care range.
3/ Profile – January 2003
The company has also begun an e-tailing service, called Sangam, which can home-deliver on order
by phone or through the Net, a diverse range of about 5000 branded and unbranded products. The
service is now available in select areas of Mumbai and Navi Mumbai, besides Thane.
HLL is one of the world’s largest packet Tea marketer. Its Tea brands – Taj Mahal, Red Label,
Taaza, A1, 3Roses - are among the top brands in the country; it also markets Lipton Ice Tea.
HLL and Pepsi have formed an alliance to distribute a full range of tea and coffee and soft
beverages through vending machines; HLL already has a base of around 15000 such machines.
The coffee business comprises Bru Instant Coffee and Deluxe Green Label Roast & Ground
Coffee.
The Kissan and Knorr Foods range comprises Spreads & Jams, Biscuit Sticks, Soups, Squashes,
Tomato Ketchup, Sauces, Puree, and Cooking Aids.
Popular Foods, like Wheat Flour and Iodized Edible Salt, under the Knorr Annapurna brand name,
have met with remarkable success. The range has been expanded with ready-to-eat 10-second
chapatis. The innovative offerings are changing consumer habits into using processed, hygienic,
healthy and convenient products.
The Kwality-Wall's Ice Cream range comprises exotic Sundaes, Viennetta Desserts, popular
‘Impulse’ segment products like Max, Cornetto and Feast, and Cornetto Ripple Softies.
Max was extended in 2001 as sugar confectioneries, because children are a key consumer segment
in confectioneries too. This is among the new businesses HLL has chosen to enter.
HLL has acquired Modern Food Industries (India) Limited, entering the bread market. Modern
Foods was the first Public Sector Undertaking to be disinvested. Besides upgrading the existing
Modern products, HLL has launched new products, among them biscuits.
HLL is liberating its brands from their existing category mindset. Historically, brands originated
and stayed within a category format. HLL sees its Power Brands as being able to occupy a unique
position in the consumer's mind and therefore being able to stretch into other product formats and
categories. All such initiatives have had a promising start, and there are more to come.
Nationwide manufacturing facilities
This diverse product range is manufactured in over 100 factories, located across the length and
breadth of India. The operations involve 2,000 suppliers and associates. About 28 factories are
situated in backward areas. In fact, all major investments of HLL, in recent years, have been either
in A-Category backward areas or No-Industry Districts. These include factories in Khamgaon and
Yavatmal (Maharashtra), Chhindwara (Madhya Pradesh), Orai, Sumerpur and Khalilabad (Uttar
Pradesh), Haldia (West Bengal), Silvassa (Dadra & Nagar Haveli), Pondicherry, Goa and Doom
Dooma (Assam). In 2001 itself, HLL set up seven new factories in backward areas.
4/ Profile – January 2003
Equally, HLL has an enviable track record in taking over sick enterprises, in response to requests
from government authorities, and converting them into viable operations. The company's units at
Mangalore and Rajpura all bear testimony to this achievement. In the process, HLL has saved
precious jobs and developed local economies. HLL is now implementing a turnaround strategy for
Modern Foods, which is progressing as per plan.
HLL's manufacturing facilities, like the Khamgaon soap plant and the Sumerpur detergent bar unit,
have been recognised as among the best in the Unilever world. HLL has adopted Total Productive
Maintenance (TPM) for achieving manufacturing excellence. Eight factories have already won
different TPM awards from the Japan Institute of Plant Maintenance (JIPM). TPM has been
launched in all key factories.
Cutting-edge distribution network
HLL’s distribution network is recognised as one of its key strengths -- that which helps reach out its
products across the length and breadth of this vast country. The need for a strong distribution
network is imperative, since HLL’s corporate purpose is “to meet the everyday needs of people
everywhere.”
HLL's products, manufactured across the country, are distributed through a network of about 7,000
redistribution stockists covering about one million retail outlets. The distribution network directly
covers the entire urban population.
In addition to the ongoing commitment to the traditional grocery trade, HLL is building a special
relationship with the small but fast emerging modern trade. HLL's scale enables it to provide
superior customer service including daily servicing, improving their range availability whilst
reducing inventories. HLL is using the opportunity of interfacing more directly with consumers
in this retail environment through specially designed communication and promotions. This is
building traffic into the stores while yielding high growth for the business.
An IT-powered system has been implemented to supply stocks to redistribution stockists on a
continuous replenishment basis. The objective is to catalyse HLL’s growth by ensuring that the
right product is available at the right place in right quantities, in the most cost-effective manner.
For this, stockists have been connected with the company through an Internet-based network,
called RSNet, for online interaction on orders, despatches, information sharing and monitoring.
RS Net covers about 80% of the company's turnover. Today, the sales system gets to know every
day what HLL stockists have sold to almost a million outlets across the country. RS Net is part of
Project Leap, HLL's end-to-end supply chain, which also includes a back-end system connecting
suppliers, all company sites and stretching right upto stockists.
RS Net has come as a force multiplier for HLL Way, the company's action-plan to maximise the
number of outlets reached and to achieve leadership in every outlet, by unshackling the field
5/ Profile – January 2003
force to solely focus on secondary sales from the stockists to retailers and market activation. HLL
Way has also led to implementing best practices in customer management and common norms
and processes across the company. Powered by the IT tools it has further improved customer
service, while ensuring superior availability and impactful visibility at retail points.
For rural India, HLL has established a single distribution channel by consolidating categories. In
a significant move, with long-term benefits, HLL has mounted an initiative, Project Streamline,
to further increase its rural reach with the help of rural sub-stockists. It has already appointed
6000 such sub-stockists. As a result, the distribution network directly covers about 50,000
villages, reaching about 250 million consumers.
Distribution will acquire a further edge with Project Shakti, HLL's partnership with Self Help
Groups of rural women. The project, started in 2001, already covers over 5000 villages in 52
districts of Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is being progressively
extended. The vision is to reach over 100,000 villages, thereby touching about 100 million
consumers. The SHGs have chosen to adopt distribution of HLL's products as a business venture,
armed with training from HLL and support from government agencies concerned and NGOs. A
typical Shakti entrepreneur conducts business of around Rs.15000 per month, which gives her an
income in excess of Rs.1000 per month on a sustainable basis. As most of these women are from
below the poverty line, and live in extremely small villages (less than 2000 population), this
earning is very significant, and is almost double of their past household income. For HLL, the
project is bringing new villages under direct distribution coverage. Plans are being drawn up to
cover more states, and provide products/services in agriculture, health, insurance and education.
This will both catalyse holistic rural development and also help the SHGs generate even more
income. This model creates a symbiotic partnership between HLL and its consumers, some of
whom will also draw on the company for their livelihood, and helps build a self-sustaining
virtuous cycle of growth.
State-of-the-art research facility
HLL has traditionally been a company, which incorporates latest technology in all its operations.
The Hindustan Lever Research Centre (HLRC), with facilities in Mumbai and Bangalore, and
global technology centres in India have over 200 highly qualified scientists and technologists, many
with post-doctoral experience acquired in the US and Europe. Set up in 1958, HLRC’s aim is to
develop new products and processes, improving benefits and quality of existing products, optimal
use of resources, energy conservation and pollution control. The company has many achievements
in these areas, with about 184 patents till date.
Product and process innovations
Major innovations have taken place in detergents manufacturing. Most recently, HLL has
developed a proprietary technology which reduces water consumption and time taken for rinsing by
50%. It is a significant benefit, given the acute water scarcity in most of India. Given that laundry
6/ Profile – January 2003
consumes upto 20% of household water, this technology will have a big impact. New technology
has helped manufacture concentrated powders without going through the high-energy route of spray
drying. These powders being of high bulk density also need less packaging material for a given
weight compared to low bulk density powders. All the money saved in energy conservation and
processing has been reinvested in better formulations and performance of products. Fundamental
research in the area of particulate soil-fabric wash liquor interactions has led to filing of several
patents that deal with avenues to improve detergency. Novel detergent bars, like Nil Mineral
Bar, and next generation pre-treatment products have also been developed.
HLL scientists have developed a patented breakthrough technology to stabilize iodine in salt,
following work on the stability of iodine under Indian conditions of storage and cooking. Iodine
added to salt is lost in transport, storage as well as in the process of cooking. The technology
developed by HLL encapsulates iodine, protecting its bio-availability. This is a very key benefit,
given the importance of iodine, especially for the mental development of young children.
Valuable insights have also been gathered in understanding soap phases and how soap properties
such as the feel, lather, colour, appearance, size and shape can be improved, resulting in better
performance. Research into how soap gets its rigidity has enabled development of bars
containing liquid actives. New understanding about network forming structurants has enabled
creation of novel bars that are milder to skin, with unique sensory feel and the ability to deliver
functional actives onto skin or hair.
Research in the biology of skin pigmentation has led to the formulation of a product like Fair &
Lovely Skin Cream and Lotion. The product has been periodically updated through new patented
actives. It has now become a global success through exports to over 30 countries. The product is
equally used by the local population of these countries, apart from those of Indian origin.
Significant technological breakthrough has also been achieved in the area of Icecream. A notable
achievement has been development of freezers, which can maintain an operating temperature below
Minus 18 Degree Celsius, even with power cuts lasting upto eight hours. The benefit has been
extended to mobile units like vans and pushcarts.
HLL has also developed the capability to design and manufacture machines in-house or have them
assembled by third parties as per given specifications. This enables the company to set up plants at
half the cost of others. Such technological developments have also led to significant improvement
in productivity. The capacity of a toilet soap line has gone up from 6,000 tonnes per annum in the
early nineties to 20,000 tonnes per annum now, while that of a detergent bar line has gone up from
7,000 tonnes per annum to 40,000 tonnes per annum now, thus substantially increasing capital
productivity.
HLL has also developed a technology to manufacture Instant Tea Powder. This has been used to set
up a 100% export-oriented plant in Etah to manufacture Instant Tea Powder for exports to Unilever
companies abroad. Research has also been carried out to see as to how nutrition in tea can be
improved and enhanced.
7/ Profile – January 2003
In the past, one of the most significant breakthroughs of HLL’s research initiative has been the
development of a technology to use non-conventional forest seed oils for soap-making which, since
the 1970s, has helped save around $1.2 billion in foreign exchange. HLL had received the
Government of India's prestigious award for import substitution. Development of Structurant
Technology for soap manufacturing also helped save costly conventional oils without any
compromise on product performance and quality. The latest technology to produce Distilled Fatty
Acid for soap making and the resultant plant capacity expansion has drastically brought down
specific energy consumption while improving distillation yields. The evolution of continuous soap
processing technology has also reduced energy consumption.
Attracting, motivating and retaining best talent
While these competencies have played a seminal role in HLL's growth and progress, the company's
key strength is its people. HLL's 32,400 employees, including about 1,425 managers, are all sharply
focused on the common goal, which is to “meet the everyday needs of people everywhere.”
HLL has equally played a seminal role in India's overall employment generation, creating over
200,000 indirect jobs in those sectors of the economy connected with the company's operations. On
an average, HLL creates five indirect jobs for every single permanent employee.
HLL abides by a policy of scrupulous meritocracy, which unfailingly seeks calibre, competence and
contribution. As early as 1942, the decision was taken to develop Indian managers for running the
business. The first Indian Director was appointed in 1951 and the first Indian Chairman in 1961.
Managers are selected by a unique, time-proven system of performance in groups and as
individuals. HLL is the number one preferred employer at leading campuses. It is enriching its
talent base with diversity by recruiting people with complementary skills, especially for the newer
businesses, and is also bringing in a large number of talented women. On completion of training,
which includes projects in Indian villages and international cities, the manager works in different
functions. Progress is based on merit, ability and performance, adhering to the company's Code of
Business Principles. The values of Truth, Courage, Action and Caring form the bedrock of these
business principles. HLL's managers are of the highest standing not only in Indian industry, but also
handle international assignments in the Unilever world. Today, over 60 HLL managers hold top
positions in different Unilever companies or corporate functions.
Training of all employees began in the early fifties and in-house management development
programmes commenced in 1953. Such formal training activities now cover all levels of
employees, through three exclusive Staff and Management Training Centres, besides training at the
company's units. First introduced in 1954, productivity techniques and payment by results are now
applied at all levels.
8/ Profile – January 2003
One of the most spectacular successes has been in developing a whole new generation of industrial
workmen. Employees at the company's new factories in backward areas have all come from an
agricultural background. But systematic training has converted them into first generation industrial
workmen. They are adept not only in operating and maintaining state-of-the-art machines but have
adopted the latest management techniques like Total Productive Maintenance (TPM). The result
has been that HLL factories, like those in Khamgaon and Sumerpur with first generation industrial
workmen, have come to be recognised as among the best in the Unilever world.
HLL's progressive and constructive policies towards its employees are specially relevant, now that
the country is globalising. The company's belief that a 'fair day's work deserves a fair day's wages'
has helped preserve harmonious industrial relations. The factories register production and
productivity rates, which are the best in the industry, and also have benefits, which are comparable
to the best in their respective regions.
Over 100 years’ link with India
The expertise and commitment of HLL's employees, coupled with Lever's more than 100 years' link
with India, gives the company a formidable competitive advantage. The first Unilever product came
to India in 1888, when Sunlight soap was introduced through imports. Lifebuoy was introduced in
1895 and other famous brands like Pears, Lux and Vim followed. Vanaspati was launched in 1918
and the famous Dalda brand came to the market in 1937.
In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company,
followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three
companies merged to form HLL in November 1956; HLL offered 10% of its equity to the Indian
public, being the first among the foreign subsidiaries to do so. Unilever, which gradually divested
its stake in HLL, now holds 51.55% equity in the company. The rest of the shareholding is
distributed among about 380,000 individual shareholders and financial institutions.
The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had
launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.
Brooke Bond joined the Unilever fold in 1984 through an international acquisition.
The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and
in 1977 Lipton Tea (India) Limited was incorporated.
Pond’s (India) Limited had been present in India since 1947. It joined the Unilever fold through an
international acquisition of Chesebrough Pond’s USA in 1986.
Since the very early years, HLL has vigorously responded to the stimulus of economic growth. The
growth process has been accompanied by judicious diversification, always in line with Indian
opinions and aspirations.
9/ Profile – January 2003
Mergers & Acquisitions
The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in HLL's and
the Group's growth curve. Removal of the regulatory framework 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 India's corporate history, the erstwhile Tata Oil
Mills Company (TOMCO) merged with HLL, effective from April 1, 1993. In 1995, HLL and yet
another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever Limited, to
market Lakme's market-leading cosmetics and other appropriate products of both the companies.
Subsequently in 1998, Lakme Limited sold its brands to HLL and divested its 50% stake in the joint
venture to the company.
HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994,
Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads.
HLL has also set up a subsidiary in Nepal, called Nepal Lever Limited (NLL), and its factory
represents the largest manufacturing investment in the Himalayan kingdom. The NLL factory
manufactures HLL's products like Soaps, Detergents and Personal Products both for the domestic
market and exports to India.
The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and
Beverages front. 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. As a measure of backward integration, Tea
Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond.
Then in July 1993, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India
Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages
business.
1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the
company entered into a strategic alliance with the Kwality Icecream Group families and in 1995 the
Milkfood 100% Icecream marketing and distribution rights too were acquired.
Finally, BBLIL merged with HLL, with effect from January 1, 1996. The merger was conceived
because the liberalised economic environment presents a host of growth opportunities to the
Group's businesses. Even after fully meeting the needs of its fast growing Home and Personal Care
businesses, HLL can adequately invest in Foods and Beverages too to capitalise on the emerging
opportunities in this sector, declared as a priority industry by the Government of India. In fact, the
post-merger HLL is much better placed to realise existing synergies and leverage financial and
management resources as a single entity.
10/ Profile – January 2003
In 1995, HLL restructured its businesses, selling its Fertiliser and Industrial Chemicals business to
the Group Company, Hind Lever Chemicals Limited (erstwhile Stepan Chemicals Limited), and
acquiring from Stepan its Popular Detergents business. This was done to allow the Fertiliser and
Industrial Chemicals Business to grow rapidly through fresh investments in expansion,
modernisation and technology upgradation, by tapping funds from the capital markets and
accessing new products and process technologies through joint ventures and equity participation, if
necessary. Simultaneously, the Detergents business required to leverage synergies in technology,
product development and marketing. The restructuring had met with excellent results for both
businesses. HLCL is now proposed to be merged with Tata Chemicals Limited.
The internal restructuring culminated in the merger of Pond’s (India) Limited (PIL) with HLL in
1998. The two companies had significant overlaps in Personal Products, Speciality Chemicals
and Exports businesses, besides a common distribution system since 1993 for Personal Products.
The two also had a common management pool and a technology base. The amalgamation was
done to ensure for the Group, benefits from scale economies both in domestic and export markets
and enable it to fund investments required for aggressively building new categories, such as
deodorants and other Personal Products.
In January 2000, in a historic step, the government decided to award 74 per cent equity in
Modern Foods to HLL, thereby beginning the divestment of government equity in public sector
undertakings (PSU) to private sector partners. HLL’s entry into Bread is a strategic extension of
the company’s wheat business. In 2002, HLL acquired the government's remaining stake in
Modern Foods.
In 2003, HLL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam
Group of Companies, a leader in value added Marine Products exports.
Social responsibilities
Unilever’s Corporate Purpose states, “to succeed requires the highest standards of corporate
behaviour towards our employees, consumers and the societies and world in which we live.” As
with Unilever, HLL's approach to Corporate Social Responsibility (CSR) is rooted in that belief.
CSR, in HLL, covers the company’s interaction with and impact on society in three distinct
areas. These are: the company’s own operations; the company’s relationships with its business
partners through the value chain; and the voluntary or philanthropic contributions it makes to
communities. HLL believes CSR should be seen as a core business activity.
HLL participates, either through its own projects or by supporting appropriate organisations, in
rural development, promotion of basic education, creating school infrastructure, management
education, and supporting R&D on relevant technologies. HLL is also actively involved in caring
for the HIV-positive, care and education for abandoned special children, hospice for the dying
destitute and terminally ill patients, support to government relief measures in natural calamities.
11/ Profile – January 2003
Integrated Rural Development - Etah & Orai in Uttar Pradesh: Integrated Rural
Development (IRD) Programme in the backward district of Etah in the state of Uttar Pradesh
(North India), was started in 1976, adjacent to the company’s dairy operations. In 1976, the IRD
Programme started with 30 villages. As of now, it has been extended to about 500 villages. The
basic activity is rural development -- implementation of programmes towards activities such as
farmers training, health of villagers, infrastructure development, improvement in productivity and
health of cattle in Etah. The project is now being undertaken jointly with Nutricia India (which has
acquired HLL’s dairy operations) and for certain health programmes, with government-run Primary
Health Centres and through autonomous bodies, known as Samitis.
HLL’s soap factory at Orai, also in Uttar Pradesh, is located in an agricultural area with high
levels of poverty. Less than half the population can read and awareness of hygiene, nutrition and
family planning is poor. The factory has devised programmes to help five local villages,
focusing on improving health and hygiene practices and on boosting income generation through
new ventures and better agriculture and animal husbandry. Regular monitoring and measurement
shows the initiative has been making significant progress in improving the lives of local people.
Project Shakti: The objectives of Project Shakti are to create income-generating capabilities for
underprivileged rural women by providing a sustainable micro enterprise opportunity, and to
improve rural living standards through health and hygiene awareness. It has already been
extended to over 5000 villages in 52 districts in Andhra Pradesh, Karnataka, Gujarat and Madhya
Pradesh. HLL's vision is to scale it up across the country by 2010, creating about 11000 Shakti
entrepreneurs, covering 100,000 villages. A typical Shakti entrepreneur conducts business of
around Rs.15,000 per month, which gives her an income in excess of Rs.1000 per month on a
sustainable basis. As most of these women are from below the poverty line, and live in extremely
small villages (less than 2000 population), this earning is very significant, and is almost double
of their past household income. For most of these families, Project Shakti is creating
opportunities to live in conditions of dignity, with real freedom from want. HLL is now in the
process of piloting ‘i-Shakti’ – an IT-based rural information service that will provide solutions
to key rural needs in the areas of agriculture, education, vocational training, health/hygiene, etc –
in Nalgonda district of Andhra Pradesh. Plans are being drawn up to bring in partners involved in
agriculture, health, insurance and education to catalyze overall rural development.
Vindhya Valley: In 2002, the company also took up a project in Madhya Pradesh, which will
impact the entire state's rural population. The mainstay of Madhya Pradesh's economy is
agriculture. Prosperity thus means increasing the income of farmers and small town and village
entrepreneurs engaged in agro processing and cottage industries. This is where HLL is
contributing its expertise. It has helped the government create 'Vindhya Valley', an umbrella
brand for food products, and support software for its marketing, manufacturing and distribution.
HLL is also supporting the state in three other projects to improve the income and quality of life
of rural communities. An umbrella brand, 'Anokha', is being created for cottage industries. The
upgradation will generate higher sales and higher returns for rural artisan communities, many of
whom are women. To impact even larger groups, HLL is helping the government set up
permanent handicraft fairs across top cities and towns of the state. The government already
12/ Profile – January 2003
operates about 15,000 fair price shops. But there are villages still, which do not have access to
such shops. Those villages have been identified, and fair price shops will be put up, each with a
cluster of villages as a catchment area. They will be run by Self Help Groups (SHGs) and
cooperatives.
Yashodadham: HLL has reconstructed a village in the Bhachau Taluka of Gujarat's Kachch
district. The village, which has been named Yashodadham, was dedicated to its 1100 residents in
December 2002. The residents belong to Nani Chirai village, which was completely wrecked by
the devastating earthquake of January 2001. Yashodadham, spread over 25 acres, comprises 289
homes. HLL has also provided a school building, an exclusive playground for children and a
multi-purpose community centre, including a crčche, health centre, community room and village
administration office. All the structures are earthquake and cyclone-resistant.
Asha Daan: HLL supports Asha Daan run in Mumbai by the Missionaries of Charity (founded
by the late Mother Teresa). Asha Daan is a home for abandoned, handicapped children, the
destitute and people affected by AIDS (HIV positive). Asha Daan had been set up on a 72,500
square feet plot, in the heart of the city leased by the company. HLL also bears the capital and
revenue expenses for maintenance, upkeep and security of the premises.
Ankur: Very similar to Asha Daan is Ankur in HLL's Doom Dooma Plantation in Assam. A
centre for special education of handicapped children aged between 5 and 15 years, it was opened
in 1993. It received the Lawrie Group Worldaware Award for Social Progress in 1999. It
provides educational, vocational and recreational activities to its 60 inmates (38 boys and 22
girls). These physically and mentally challenged children are taught skills such as cookery,
painting, embroidery, bamboo crafts, weaving, stitching, depending on their aptitudes to make
them self-reliant. A few of the children have been able to pursue normal education in regular
schools after obtaining rehabilitative support.
Kappagam: Encouraged by Ankur's success, 'Kappagam' (means 'shelter'), a second centre for
special education of mentally and physically challenged children was set up in HLL's plantations
in Coimbatore district of Tamil Nadu in 1998. At present, Kappagam takes care of seven boys
and 10 girls. Apart from various rehabilitative inputs, the centre provides the children with
physiotherapy and speech therapy.
Rural Education Programme - Khamgaon: HLL is also developing a Rural Education
Programme, which aims at using audio-visual aids, like video cassettes and CDs. These tools
enable teachers to explain basic concepts in mathematics, like operation on numbers, fractions,
algebra and geometry, to primary school children in villages. The project was piloted by HLL's
Khamgaon factory, in Maharashtra. The tools have already been distributed to schools in the
vicinity of HLL's factories at Khamgaon, Yavatmal (also in Maharashtra).
In the area of sustainable development, HLL has taken up projects on energy conservation,
water conservation, tree plantation and watershed management, in addition to all necessary
measures in the factories for environment protection & pollution control.
13/ Profile – January 2003
Although the manufacturing activities at HLL are not energy-intensive compared to steel, oil,
cement or paper industries, the company has embarked upon a systematic energy conservation
programme given the national concern over deficiency of domestic energy resources and
escalating import bill. The company and its factories’ contributions to energy conservation have
been recognised by the State Governments and industry associations through their awards.
To highlight some results, HLL's efforts focussed on energy conservation as well as use of
renewable energy have resulted in a reduction of energy consumption by 61% since 1996. It has
also led to a 58% reduction in emission of Green House Gases. Similarly, HLL has reduced its
ground water consumption by over 50%, through a series of technology innovations across the
entire supply chain, inducting novel processing routes, adopting clean technologies and through
recycle/reuse of treated effluent. A majority of HLL factories are now ‘zero liquid discharge
units’.
HLL’s work on watershed management, is best exemplified by the project in the Khamgaon
factory With an average rainfall of just 585 mm, Khamgaon faces acute scarcity of water for
agriculture and domestic consumption. The stony soil strata, low retention capacity of soil, and
the undulating topography leads to water run-off, aggravating the water scarcity. All rivulets and
canals in the area dry up, particularly during the summer months. Population pressures add to the
problem.
In 1993, HLL began its initiative to develop a green belt and conserve water. A five-hectare plot
in the factory was taken up for soil conservation and water harvesting through afforestation.
Today that plot is a veritable forest of 6293 trees, including 1468 ornamental plants, 645 fruitbearing
plants and 4180 forestry species. In addition, 1000 kg of vetiver grass has been planted in
the form of hedgerows and vegetative barriers.
There has been remarkable improvement in the quality of soil. Along with the vegetation, it has
resulted in an annual conservation of approximately 8000 cubic metres of water. The TERI,
which researched the project, says, “The HLL model is a unique example for optimally managing
and utilising natural resources to create wealth by enhancing/securing livelihoods. The model can
and should indeed be replicated in other agro-climatic regions.” The TERI study also shows that
after seven years when the fruit plants start yielding, the annual revenue from scientific
harvesting of fruits, fuelwood and fodder would be more than Rs.30,000, which can partly cover
the annual maintenance expenditure. Major returns can be expected after 25 to 30 years, when
most of the trees are ready for harvest; Income from the sale of timber, at current market prices,
can exceed Rs.25 million.
HLL’s plantations are involved in the Unilever-driven Sustainable Agriculture project. Among
the steps are crop protection with environment-friendly chemicals, use of organic manure, use of
renewable fuel instead of coal, and vermiculture. The company interacts with NGOs and local
communities surrounding the estates, who have been introduced to income-generating activities.
14/ Profile – January 2003
Commitment to national aspirations
Unilever, a true multilocal multinational, believes that its companies can best progress through a
combination of global linkages and a locally tuned consumer understanding built on deep roots in
local cultures. HLL, an Indian registered company, has therefore traditionally remained committed
to its Indian roots, while retaining strong links with Unilever, accessing its R&D knowledge base
and international marketing expertise for developing products specifically suited to Indian markets.
The company has also been steadfast in ensuring that its strategic plans are consistent with the
welfare of all stakeholders and with the highest standards of corporate behaviour. The company
abides by a 'Code of Business Principles' and the management ensures that it is communicated to,
understood and observed by every single employee. HLL is reputed for conducting its business in a
transparent manner with honesty and integrity and with respect for the interests of those the
company's activities can affect. HLL believes that this reputation is an asset, just as real as its
people, brands and factories.
HLL markets products, which consistently offer value in terms of price and quality and are safe for
their intended use. Its operations are run in an environmentally sound and sustainable manner,
ensuring that the processes and products conform to standards set by the authorities. If HLL
straddles the Indian corporate world, it is also single-minded in identifying itself with Indian
aspirations and devotes itself to upgrading the value of Indian resources to globally competitive
levels.
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Re: Hindustan Unilever- An FMCG Company
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Re: Hindustan Unilever- An FMCG Company - April 16th, 2011

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