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Hind Lever bets big on water

August 02, 2004 15:23 IST

At a time when Hindustan Lever is going through one of its most challenging phases of growth, the company is betting big on its water business.

The Indian arm in association with its Anglo-Dutch parent, Unilever, has registered 30 patents globally.

Developed in-house, HLL believes that the 'Pure It' brand of water purifiers will change the dynamics of the water business.

The new initiative, which is designed to cater to India and other developing and emerging markets, is expected to be one of the major growth drivers in future.

Says M S Banga, chairman of Hindustan Lever, "The water business will be the company's biggest growth pillar category in the future." Adds another senior Lever executive, "We believe that the product has got the application beyond India."

In other words, parent Unilever will be taking yet another leaf out of Hindustan Lever's books and may introduce it in other markets. The first product that was plucked by Unilever from HLL was Fair & Lovely fairness cream followed by Annapurna salt.

Even HLL's Ayush range of ayurvedic products has been registered in some countries. For the calendar year 2003, the foods business contributed Rs 1,692.81 crore (Rs 16.93 billion) to HLL's total turnover of Rs 10,138.35 crore (Rs 101.38 billion).

At present, its tea brand Brooke Bond is the largest contributor of Rs 500 crore (Rs 5 billion) to the foods business turnover. It is expected that 'Pure It' will overtake Brooke Bond's sales in the future.

According to the company sporkesperson, the system, which will comprise a machine and replaceable parts, will cost less than 20 paise to purify a litre of water. The cost includes one-time payment for purchasing the machine and replacement of the parts.

"The objective is to bring the cost incurred by a customer down to a level so that an average Indian could afford it," the spokesperson said adding that the system would not only purify any kind of water, it would save consumers from five diseases.

It is claimed that the system will have the best of all the existing technologies available in the market. "The company has started working on the system in Chennai. We are happy with its performance," he added.

The system, to be introduced across the country, would be brought in by a different distribution channel. "The product requires a different kind of approach of distribution as it needs education as well as demonstration to the consumers," he added.

For its beverages (tea and coffee), the company has a distribution alliance with softdrink major, Pepsico India.

The big players in the Rs 700 crore (Rs 7 billion) water purification market are Aquaguard from Eureka Forbes (a joint venture between Forbes Gokak and Electrolux of Sweden), Ion Exchange, Permionics India, Softel Machines and Sintex Industries. Over 70 per cent of the organised market is dominated by Eureka Forbes, while the rest is distributed among others.

In the packaged water business the major brands are Aquafina, Kinley, Bailey, Bisleri and Himalaya.
BS Corporate Bureau in Mumbai