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Each HLL brand can generate Rs 1000 cr: Banga
June 13, 2003 16:54 IST
Consumer goods major Hindustan Lever Ltd said on Friday that each of its mega brands is capable of generating a sale of Rs 1,000 crore (Rs 10 billion) in the foreseeable future.
The power brands have captured 93 per cent of the domestic consumer business while the top five accounted for sales of over Rs 3,000 crore (Rs 30 billion), HLL chairman M S Banga said while addressing the annual general meeting in Mumbai on Friday.
Reviewing the performance of HLL's business strategy, drawn two years ago, and its future plans, Banga said there was enormous room for growth of power brands and that could be done by leveraging the scale, redefining categories and adopting technological innovation.
The company was a clear leader in the laundry soap segment as well as personal wash segment with double-digit growth in the market marked by low price competition, he said.
"We will compete with low price competitors by playing to our strengths -- using our strongest brands backed by superior technology and the lowest cost supply chain," Banga said, adding the company would leverage its unique combination of local and global scale.
Speaking on brand extension, Banga said products like Lifebuoy talc have had "a promising start and there are more to come."
This would be supported through continued investment in technology, both to make better products and secure cost advantage, he added.
Banga said HLL's own technology capability (about 200 R&D people), coupled with Unilever's technology network of over 5000 R&D personnel and a budget of $1.3 billion, gave the company the strength to compete in the market place.
New opportunities for growth, which arose from Project Millennium, increased the size of HLL's market opportunity by about 40 per cent, he added.
New businesses, confectionery and ayurvedic healthcare, and other initiatives such as Sangam retailing business and direct-to-consumer business have made good progress, he said.
"There is a big opportunity to grow processed foods, which are still a very small proportion of the overall largely commoditised foods market", he added.
However, developing this market would require relevant and different products, which cater to Indian tastes and habits, he said adding, "It would also need the sustained and considerable investment and time for market development."
Significant investment in IT has provided connectivity across the supply chain, from the supplier to the stockists, thereby enhancing customer service while bringing down working capital.
"HLL is also increasing the width and depth of its distribution. It has established a single distribution channel for rural India by consolidating categories, and is now reaching out to 25 crore (250 million) rural consumers in approximately 50,000 villages", he said.
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