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Price war costs HLL dear
BS Corporate Bureau in Mumbai |
April 30, 2004 10:59 IST
The price war with Procter & Gamble on detergent and shampoo turfs has affected Hindustan Lever's bottomline in the first quarter.
For instance, in shampoos, the promotional offer of "buy one and get one free" bottle of Sunsilk and Clinic Plus, has led to decline in sales value by 11 per cent.
In laundry, though volumes increased, the recent price cuts in Surf and Surf Excel led to decline in value. In toothpaste, the sales value declined by 9.6 per cent.
The businesses, which grew are HPC, skin, personal wash and colour cosmetics.
In the HPC business, personal wash (soaps) grew 9 per cent, led by Lifebuoy, Lux and Pears. In skincare, HLL recorded a growth of 17 per cent led by Fair & Lovely and Ponds and in colour cosmetics, the business grew by 30 per cent, led by Lakme.
In the foods business, sales increased in tea, coffee (21 per cent), culinary products (6 per cent), ice creams (2 per cent) and salt (4 per cent) except atta. HLL chairman M S Banga today announced a 10-point programme to increase margins in its businesses and bring down costs.
The programme includes global buying initiatives, technology driven cost saving, tax efficiency and sourcing operation (setting up units in Uttranchal Pradesh and Himachal Pradesh for HPC), channel financing, large scale logistics including continuous replenishment system, restructuring funded by exceptional income, improving performance of value destroyers, cost savings from simplified structure and scale savings in non-production item.