A COMPANY REPORT ON

Submitted by:

Sumit Sharma

MBA GeneralRoll no. A0101913094

Under the supervision of

J K Sharma Sir

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY, Noida, Uttar Pradesh

Industry Profile – Fast Moving Consumer Goods (FMCG)

Hindustan Unilever Limited (HUL) is an Indian Fast Moving Consumer Goods

Company. The term FMCGs refers to those retail goods that are generally replaced or fully used

up over a short period of time (i.e. products that are sold quickly). In simple words these are

goods which are the essential items we purchase when we go shopping and used it in our

everyday life. These goods are referred to as ‘fast moving’ because they are the quickest items to

leave the shelves. They also tend to be high volume, low cost items. FMCG have a short shelf

life, either as a result of high consumer demand or because the product deteriorates rapidly. It is

also known as consumer packaged goods industry. The Indian FMCG sector is the fourth largest

sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC

presence and is characterized by a well established distribution network, intense competition

between the organized and unorganized segments and low operational cost. Availability of key

raw materials, cheaper labour costs and presence across the entire value chain gives India a

competitive advantage. FMCG sector faces a huge demand for skilled professionals in fields like

sales & marketing and leadership positions to name a few. This industry primarily deals with the

production, distribution and marketing of consumer packaged goods.

The Fast Moving Consumer Goods, FMCG, sector’s contribution to the country’s GDP

now stands at 24.3 per cent. The FMCG sector has benefited the most from this young

burgeoning population. The sector grew 10 per cent from 2000 until 2010 with the sector’s

contribution to GDP increasing from 13 per cent to 24.3 per cent over the same period. The

Indian FMCG industry is over INR 1300 billion in size. It touches the life of every Indian and

therefore has perhaps the widest reach among all industries in India! The industry has tripled in

size over the last 10 years, growing much faster than in past decades. The industry’s potential to

grow further and faster is awesome, given the low penetration of most categories and rising

consumer incomes. Given the inherently essential nature of the products, the sector is more or

less immune to recessionary pressures.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0

200

400

600

800

1000

1200

1400

Growth (in billion)

Growth (in billion)

The sector is growing at rapid pace with well-established distribution networks and

intense competition between the organized and unorganized segments. It has a strong and

competitive MNC presence across the entire value chain. The FMCG’s promising market

includes middle class and the rural segments of the Indian population, and give brand makers the

opportunity to convert them to branded products.

53%

20%

15%

10%2%

Indian FMCG Market Share

Food and BevreagesPersonal CareTobaccoHousehold CareLightining

Introduction – Hindustan Unilever Limited (HUL)

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods

Company with a heritage of over 80 years in India. In the summer of 1888, visitors to the

Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in

England by Lever Brothers". With it began an era of marketing branded FMCG. 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 HUL in November 1956. It is headquartered in Mumbai, India.

HUL has eight Board of Directors of the Company comprising Non-Executive Chairman, three

Executive Directors and four Non-Executive Independent Directors. HUL has produced many

business leaders for corporate India, including Harish Manwani the non-executive chairman of

HUL and currently the chief operating officer of Unilever. He is also a member of Unilever

Leadership Executive team (ULE), which comprises the company's top management and is

responsible for managing Unilever's profit and loss, and delivering growth across its regions,

categories and functions Mr. Sanjiv Mehta is appointed as the Managing Director and Chief

Executive Officer of HUL. He has also been appointed as Executive vice-president, South Asia,

Unilever and is also the executive head of the South Asia cluster for Unilever. The Company has

over 16,000 employees and 2000 managers and has an annual turnover of around Rs.25, 206

crores (financial year 2012 - 2013). HUL is a subsidiary of Unilever, one of the world’s leading

suppliers of fast moving consumer goods with strong local roots in more than 100 countries

across the globe with annual sales of €51 billion in 2012. It is owned by Anglo-Dutch company

Unilever which owns a 67% controlling share in HUL. Hindustan Unilever's distribution covers

over 2 million retail outlets across India directly and its products are available in over 6.4 million

outlets in the country. It has over 35 brands spanning 20 distinct categories such as soaps,

detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods,

ice cream, and water purifiers, the Company is a part of the everyday life of millions of

consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy,

Surf Excel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent,

Axe, Bru, Knorr, Kissan and Pureit. HUL works to create a better future every day.As per

Nielsen market research data, two out of three Indians use HUL products

Sales Pattern of HUL over the years

Segment wise sales 2008 - 09 2009 - 10 2010 - 11 2011 - 12 2012 - 13

Soaps and

Detergents

49% 48% 46% 48% 49%

Personal Products 29% 30% 32% 31% 31%

Beverages and

Packed food

19% 20% 20% 19% 18%

Others 3% 2% 2% 2% 2%

2008 - 09 2009 - 10 2010- 11 2011 - 12 2012 - 130%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OthersBeverages and Packed foodPersonal ProductsSoaps and Detergents

Turnover (category wise)

Rs. Crores

Year Sales) 2009 2010 2011 2012 2013

Soaps and Detergents

9770.26 8180.29 8683.88 10488.38 12460.9

Personal Care Products

5272.31 4969.36 5750.68 6486.45 7309.10

Beverages 2272.29 2119.44 2309.23 2577.02 2913.67

Packed Foods 1020.69 942.91 1162.28 1341.93 1473.86

Others 1911.70 1315.65 1474.94 841.82 1048.79

TOTAL

TURNOVER

20239.33 17523.80 19381.01 21735.60 25206.38

2009 2010 2011 2012 20130

5,000

10,000

15,000

20,000

25,000

30,000

20239

1752319381

21735

25206

Turnover

Turnover

Milestones Achieved

Five oh HUL’s leading brands – LUX, DOVE, PEARS, CLINIC PLUS AND SUNSILK

– won the Readers Digest Trusted brand 2008 Awards.

Four HUL brands featured in the top 10 list of the economic times brand equity most

trusted brands 2008 survey

HUL was awarded the Bombay chamber civic award 2007 in the category of sustainable

environment initiatives.

HUL was selected as the top Indian company in FMCG Sector for the DUN AND

BRADSTREET – American express corporate award 2007.

Eighteen of HUL's brands featured in the ACNielsen Brand Equity list of 100 Most

Trusted Brands Annual Survey (2012), carried out by Brand Equity, a supplement of The

Economic Times. FMCG category for its safety and health initiatives and continuous

improvements on key metrics.

HUL's leadership-building potential was recognized when it was ranked 4th in

the Hewitt Global Leadership Survey 2007

A study conducted by Aon Hewitt, The RBL Group and Fortune in 2011, ranked the

company number six in the list of 'Top Companies for Leaders 2011 Study Results'.

In 2012 HUL was recognized as one of the world’s most innovative companies by forbes.

With a ranking of number 6, it was the highest ranked FMCG Company.

Hindustan Unilever Limited won 13 awards at the Emvies 2012 Media Awards organized

by the Advertising Club Bombay in September 2012.

In July, 2012 Hindustan Unilever Limited won the golden peacock occupational health

and safety award for 2012 in

As per the latest Nielsen Campus Track-Business School Survey released in February

2013, Hindustan Unilever Limited emerged as the No.1 employer of choice for B-School

students who graduated in 2013, across functions. HUL also retained as the “Dream

Employer” status for the 4th year running continues to be the top company considered for

application by B-School student in India.

Market Share of HUL

The market share of HUL is 36.4% as compared to 30% market share of ITC, 8.2%

NESTLE, 6% BRITANNIA, 4.3% DABUR and 15.1% Others(NIRMA, COLGATE etc). This

shows that ITC is the biggest competitor of HUL.

36%

30%

8%

6%

4%15%

market share

Hindustan unileverITCNestleBritanniaDaburOthers

Mergers and Acquisitions By Hindustan Unilever Limited

NAME OF THE

COMPANY

MERGERD WITH YEAR

Kothari General Foods

Corporation Limited

Brooke Bond India Limited 1992

Tea Estates India Limited Brooke Bond India Limited 1993

Kissan products limited Brooke Bond India Limited 1993

Lipton India Limited Brooke Bond India Limited 1994

The Tata Oil Mills

Company Limited

Hindustan Lever Limited 1995

Pond’s (India) Limited Hindustan Lever Limited 1997

International Bestfoods

Limited

Hindustan Lever Limited 2001

Merryweather Food

Products Limited

Hindustan Lever Limited 2005

Vashisti Detergents Limited Hindustan Lever Limited 2006

Bon Limited Hindustan Lever Limited 2010

Products

Unilever makes and sells products under more than 1,000 brand names worldwide. Two

billion people use them on any given day. The products can be categorized under the following

categories

Food and drink

Home care

Personal care

Water purifier

48%

28%

13% 6%3% 2%

Product Share

Soaps and DetergentsPersonal Care ProductsBeveragesFoodsIce creamsOthers

Food brands:

Annapurna salt and atta

Bru coffee

Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea

Kissan squashes, ketchups, juices and jams

Lipton tea

Knorr soups & meal makers and soupy noodles

Kwality Wall's frozen dessert

Modern Bread, ready to eat chapattis and other bakery items

Magnum (ice cream)

Homecare Brands

Active Wheel detergent

Cif Cream Cleaner

Comfort fabric softeners

Domestos disinfectant/toilet cleaner

Rin detergents and bleach

Sunlight detergent and colour care

Surf Excel detergent and gentle wash

Vim dishwash

Magic – Water Saver

Personal Care Brands:

Aviance Beauty Solutions

Axe deodorant and aftershaving lotion and soap

LEVER Ayush Therapy ayurvedic health care and personal care products

Breeze beauty soap

Clear anti-dandruff hair products

Clinic Plus shampoo and oil

Close Up toothpaste

Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant

deodorants

Denim shaving products

Fair & Lovely skin-lightening products

Hamam

Lakmé beauty products and salons

Lifebuoy soaps and handwash range

Liril 2000 soap

Lux soap, body wash and deodorant

Pears soap

Pepsodent toothpaste

Pond's talcs and creams

Rexona soap

Sunsilk shampoo

Sure anti-perspirant

Vaseline petroleum jelly, skin care lotions

TRESemmé

TIGI

Water Purifier Brand:

Pureit Water Purifier

Analysis of Share price of Hindustan Unilever Limited

Month/

Year

Oct’ 13 Nov’13 Dec’13 Jan’14 Feb’14 March’14

High 630.00 614.70 597.40 574.10 573.85 557.00

Low 607.05 23 606.50 8 590.40 7 565.00 9 565.85 8 548.00 9

This data of the share price of HUL for the last six months shows that the difference between the

High and Low of the HUL share price was maximum in October’ 13 i.e. Rs 22.95, this shows

there was too much fluctuation in stock price in October’13. The share price was highest in

October and this shows profitable working of the company during that period.

Corporate social Responsibility

Hindustan Unilever Limited firmly believes that it has commitment to all its stakeholders -

consumers, employees and the community in which it operates. It can fulfil this commitment only

by sustainable growth. The Vitality mission of the company aims to improve quality of life

through their products and through their interventions in the community. HUL's key CSR

initiatives are undertaken with a long-term view. Initiatives that are sustainable, that have long-

term benefits and that have business linkage are accorded priority. Some initiatives are brand

driven, some are driven by our people and some are driven by their processes. On the social front,

HUL works in areas of Health & Nutrition and Empowerment of Women, their economic agenda

will be driven towards Enhancing Livelihoods and the environmental agenda will focus on Water

Conservation and cutting Green House Gases. They have developed specific programmes and

initiatives to address each of these.

  HUL has a CSR committee. The Committee formulates and monitors Corporate Social

Responsibility Policy and the activities to be undertaken by the Company. The Committee also

regularly reviews the performance of the Company in area of Corporate Social Responsibility

and works in the following areas:

1. Providing education on health and hygiene

2. Women empowerment

3. Water management

4. Rehabilitation of special or underprivileged children

5. Care for the destitute and HIV positive

6. Rural development

7. Plays active role in natural calamities

Unilever Sustainable Living Plan

The Unilever Sustainable Living Plan (USLP) sets out to decouple their growth from

their environmental impact, while at the same time increasing their positive social impact.

Unilever Sustainable Living Plan was launched on 15th November 2010 at London, Rotterdam,

New York and New Delhi simultaneously. It has three big goals which HUL aims to achieve by

2020. They are:-

1. To improve health and well-being

2. To reduce environmental impact

3. To source 100% of our agricultural raw materials sustainably and enhance the livelihoods

of people across our value chain.

Supporting these goals are seven commitments underpinned by targets spanning HUL’s

social, environmental and economic performance across the value chain – from the sourcing of

raw materials all the way through to the use of their products in the home.

In the second year of their Plan, they made steady progress towards their goals. Their USLP is

ambitious and they continue to strive to deliver their stretching goals.

Improved Health and Well-Being

1 Health and Hygiene

By 2020 HUL wishes to help more than a billion people to improve their hygiene habits

and aims to provide safe drinking water to 500 million people. This will help reduce the

incidence of life-threatening diseases like diarrhea.

2 Improving Nutrition

HUL will continually work to improve the taste and nutritional quality of all their products.

By 2020 they will double the proportion of their portfolio that meets the highest nutritional

standards, based on globally recognized dietary guidelines. This will help hundreds of millions

of people to achieve a healthier diet.

Reducing Environmental Impact

3 Greenhouse Gases

HUL aims to split the greenhouse gas impact of their products across the lifecycle by

2020. To achieve this, it aims to reduce greenhouse gas emissions from skin cleansing and hair

washing and greenhouse gas emissions from washing clothes.

4 Water

HUL aims to halve the water associated with the consumer use of our products. Reduce

water use in the laundry process by manufacturing products which can be easily rinsed and

products that use less water. It also aims to reduce water use in agriculture and in

manufacturing process

5 Waste

HUL aims to reduce the waste associated with the disposal of their products by Recycling

packaging. This will help in increasing recycling recovery rates, increasing recycling content,

reusing packaging and by tackling sachet waste.

Enhancing Livelihood

6 Sustainable Sourcing

By 2020 HUL will source 100% of their agricultural raw materials sustainably. They plan

to achieve this by sourcing 50% by 2015; 100% by 2020.

7 Better Livelihoods

By 2020 HUL will engage with at least 500,000 smallholder farmers and 75,000 small-

scale distributors in their supply network. They have increased the number of tea farmers trained

in sustainable practices to around 450,000. The next step is to develop a methodology to assess

improvement in smallholder livelihoods. They have consolidated their small-scale distributors

programme, reaching 48,000 entrepreneurs.

Mentioned below are the projects that Hindustan Unilever Limited is currently active in and

intends to pursue actively in the future.

PROJECT SHAKTI - Changing Lives in Rural India: HLL's vision for Project Shakti is

to scale it up across the country, covering 100,000 villages and touching the lives of 100

million rural consumers by 2005.

LIFEBUOY SWASTHYA CHETANA - Health & Hygiene Education Started in 2002,

the programme has as of now covered about 15000 villages in 8 states -- Uttar Pradesh,

Bihar, Jharkhand, West Bengal, Orissa, Madhya Pradesh, Chattisgarh and Maharashtra; it

has already touched about 70 million people, imparting hygiene education to over 25

million children. The vision of this on-going project is to make a billion Indians feel safe

and secure by focussing on their health and hygiene needs.

FAIR & LOVELY FOUNDATION - Economic Empowerment of Women Launched in

2003, Fair & Lovely Foundation seeks to impact the lives of about 5000 women by 2005.

This will be done through scholarships and enterprise initiatives. For career guidance, it

seeks to touch millions of aspiring women and students in an ongoing programme,

currently covering three states and all main metros in the count

GREENING BARRENS - Water Conservation and Harvesting HLL's vision is to

continuously innovate technologies to further reduce water consumption and further

increase conservation in its operations. Simultaneously, HLL sites will progressively help

communities, wherever required, to develop watersheds.

HAPPY HOMES - Special Education & Rehabilitation Under the Happy Homes

initiative, HLL supports special education and rehabilitation of children with challenges.

Other projects that HLL is involved in are Asha Daan, Ankur, Kappagam, Anbagam,

Yashodadham, Rural Education Project at Khemgaon, Integrated Rural Development and

Vindhya Valley. Detailed activities of these projects are mentioned in the report.