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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 HLL 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
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 Closeup 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 undereye 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 Elle18 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 Rollon, 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.
PRODUCT & QUALITY STRATEGIES:
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.
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 & GroundCoffee.
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 :
• Readytoeat 10second chapatis.
• The innovative offerings are changing consumer habits into using processed,
hygienic, healthy and convenient products.
• The KwalityWall'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.
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 it’s 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 ACategory backward areas or NoIndustry 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.
PROCESS STRATEGIES
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.
CUTTINGEDGE 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 ITpowered 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 costeffective manner.
For this, stockists have been connected with the company through an Internetbased
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 endtoend supply chain, which
also includes a backend 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
actionplan to maximise the number of outlets reached and to achieve leadership in every
outlet, by unshackling the field
The company has set up the Network, a direct selling channel, offering the lever Home
range of Laundry and Home Care products and the Aviance Personal Care range.
The company has also begun an etailing service, called Sangam, which can homedeliver
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.
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 longterm 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 substockists. 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.
HINDUSTAN Lever Ltd (HLL) focus on exports by leveraging its position as a cost-
efficient sourcing area for Unilever globally, company officials said. HLL reported an 18
per cent growth in exports with home and personal care, beverages and marine products
contributing substantially.
HLL FOCUSSES ON:
• Opportunities in leather, thermometer and mushroom and review them,'' HLL has
a significant advantage in the fact that it is a cost-efficient sourcing area for
Unilever.
• The company focussing on country specific products such as marine products,
castor oil, coffee and rice for the export market.
• HLL would continue to drive market growth by employing a strategy to
understand the consumer.
• HLL follows short supply chain for distributing its products.
• Optimum utilization of resources.
• Focus on Power brands
• Improving profitability of Foods business
• Securing the future of non core businesses
IT STRATEGIES
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 postdoctoral 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.
The constant endeavor of HLL's IT Services has been to bring the best-of-breed business
solutions, business value, and benefits across all operations. With the implementation of
robust transaction systems enabling internal integration, the company's current IT
strategy is focused on extending the supply chain to suppliers and distributors, deploying
a broadband terrestrial and VSAT based network, developing remote online transaction
processing with centralized processing, ensuring Web enabled transaction systems and
corporate data warehouse operations, and datacenter infrastructure consolidation.
Product and process innovation:
Detergents
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 by50%. It is a significant benefit, given the acute water scarcity in most of India.
Given that laundry consumes upto 20% of household water, this technology will have a
big impact.
New technology has helped:
• Manufacture concentrated powders without going through the highenergy 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 soilfabric 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 pretreatment
products have also been developed.
Salts:
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.
Soaps:
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.
Beauty products:
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.
Ice creams:
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.
Tea and coffee:
HLL has also developed a technology to manufacture Instant Tea Powder. This has been
used to set up a 100% exportoriented 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 enhance
HLL has also developed the capability to design and manufacture machines inhouse
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.
Benefits:-
In the past, one of the most significant breakthroughs of HLL’s research initiative has
been the development of a technology to use nonconventional 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.
HUMAN RESOURCE STRATEGIES
Attracting, motivating and retaining best talent
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, timeproven 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 inhouse 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.
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 stateoftheart 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 recognized 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 globalizing.
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.
CONCLUSION
The company has 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 singleminded in
identifying itself with Indian aspirations and devotes itself to upgrading the value of
Indian resources to globally competitive levels.