MUMBAI: After 51 years of being known in India as Hindustan Lever Ltd or HLL, the FMCG giant is going in for a name change: HUL is what it will be known as henceforth - short for Hindustan Unilever Limited.
The name change, announced by the HLL board yesterday alongside its quarterly results, is subject to shareholder approval.
An official announcement made by the company states that the proposed name change provides the optimum balance between maintaining the heritage of the company and the future benefits and synergies of global alignment with the corporate name of Unilever. Most importantly the proposed name retains "Hindustan" as the first word in its name to reflect the company's continued commitment to local economy, consumers and customers and employees.
HLL chairman and Unilever Asia Amet president Harish Manwani said, "The name change is a significant milestone. It retains the company's continued commitment towards its local roots while leveraging the global scale and reputation of Unilever with its consumers and other stakeholders in India."
Additionally, HLL announced its results for December quarter 2006.
Total sales grew by 6.1 per cent, while growth in continuing businesses (i.e. after eliminating impact of disposals) was higher at 6.9 per cent. The FMCG business grew by 8.5 per cent for this quarter, while also ahead of other categories. For the full year FMCG saw 12.8 per cent growth.
An official announcement issued by the company stated that the HPC business grew at 8 per cent, led by double digit growth in laundry and toothpaste, with brands like Close Up leading growth in toothpaste category and Lifebuoy, Pears and Lux leading the growth in the personal wash segment. Strong innovations continued during the quarter and included the relaunch of Breeze, Vaseline body lotion, Lux body wash, scalp oil control variant of Clinic All-Clear and Ponds Age Miracle at the top end of the skin care market.
The foods business grew by 10.9 per cent. In Beverages, Taaza was relaunched during the quarter aiding growth witnessed in Tea.
For full year 2006, sales from continuing businesses were 10 per cent higher than in the previous year. FMCG business had a 12.8 per cent increase with broad based growth across categories leading to both HPC and Foods businesses growing by 13.7 per cent and 9 per cent respectively. Improved mix, selective price increases and robust cost saving initiatives led to higher gross margins. A significant part of this gross margin improvement was redeployed in supporting brands for driving sales growth. Consequently advertising and promotion expenditure increased by 26.6 per cent, adds the release.
Manwani added, "Our continuing business has witnessed double digit growth for the second consecutive year with broadbased growth in both home and personal care and foods.
"Consumer relevant innovations, effective market activation and appropriate brand support were the key drivers for this growth. Market growth has been encouraging. We also recognize the challenge of cost escalation, and in the competitive context, achieving cost leadership across the extended supply chain continues to be a key priority.
"We will continue to leverage our focused portfolio of powerful brands to market leadership and grow across categories."
