PROJECT WORK

PROJECT ON FMC G (FAST MOV ING CON SUM ER GOO DS)

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INTRODUCTION
fast Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are
roducts that are sold quickly and at relatively low cost. Examples include non-durable goods such
~ soft drinks, toiletries and grocery items. Though the absolute profit made on FMCG products
is relatively small, they generally sell in large quantities, so the cumulative profit on such products
can be substantial.
fMCG have a short shelf life, either as a result of high consumer demand or because the
product deteriorates rapidly.
The FMCG sector in India is at present, the fourth largest sector with a total market size in
e1cess of USO 13 billion as of 2012. This sector is expected to grow to a USD 33 billion industry
by 2015. FMCG goods are all consumable items that one needs to buy at regular intervals. These
iterns have a quick rate of consumption and a high return.

Global Leaders in the FMCG segment are :

Nestle, ITC, Hindustan Unilever Limited, Reckitt Benckiser, Procter & Gamble, Coca-cola,
General Mills, Pepsi, Gillette, etc.

rn

PEST ANA LYSIS (FMCG SECTOR)

Pest Analysis (FMC GSector)

l. GST Regime 1. GDP rate increase along

2. Transportation and infrastructure development 2. Annual profit of this sector is
in rural areas helps in distribution n en-vo rk. $ 14.72 billion.
3. Restri ctions in import policies. 3. Indian FMCG recorded 16% Sales
4. Helps for agricultural sector. Growth in last Fiscal.
4. It is the 4th largest sector of India.

l. Rural employment
2- Volume-driven grmvth in rural market 1. Technology has been simplified,
3 available in the industry.
· Major young population can increase revenue
4 2. Foreign players help in high
· The Indian culture, social and lifestyles are
technological development.
changing drastically
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366 Project Work

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SWOT ANALYSIS (FMCG SECTOR)

S-Strengths
1. Low operational cost
2. Established distribution networks in both urban and rural areas
3. Presence of well-known brands in FMCG sector

W-Weaknesses
1. Lower scope of investing in technology and achieving economies of scale
2. Low export level
3. Counterfoil Products

0-0pportunities
1. Untapped Rural Market
2. Rising Income Levels
 Project Work 367

3_ Large Domestic Market

4_ Export Potential
s. High consumer goods spending

T-Threats
1. Removal of import restrictions
2. Slowdown in rural demands
3. Tax and regulatory structure

COM PANY PROFILE ...

■ HUL

■ AMUL
y ,.mul
The Taste of India

■ DABUR

Ill
_ _ :368 Project Work

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INTRODUCTION
• Hindustan Unilever Ltd. (HUL) is India's largest consumer goods company based in
Mumbai, Maharashtra. It is owned by the British-dutch company, Unilever which controls
52% majority stake in HUL. Its products include goods, beverages cleaning agents and
personal care products. It is a company with a heritage of over 75 years in India and touches
the lives of two out of three Indians. HUL works to create a better future everyday and
helps people feel good, look good and get more out of life with brand and services that are
good for them as well as good for others.

.~
snapshot. . •

,
• Type: Public Company
■ BSE: HUL
■ Industry: FMCG
■ Date of Establishment: 1933
■ Headquarters: Mumbai, India
■ Corporate Address: Unilever House B.D., Sawant
Marg, Chakala, Andheri East, Mumbai - 400099,
Maharashtra.
■ Business Operation : Household & Personal Products
■ Key Peop 1e: Harish Manwani (Chairman) Nitin Paranjpe (CEO & Managing Director)
■ Revenue: 18,220.27 crore (US$ 3.96 billion)
(2009-2010)
■ Employee:, M ore than 15,000 Direct Employees including more than 1400 managers.
■ Parentage Cd' ; 1 ) · Unilever PLC.
■ Financial s: Total Income - ~223977.4 Million (Year ending March 12)
■ Company Sh~·etarv· D ev Bajpai

Formation .. .
HUL was formed in 1933 as Lever Brothers India Ltd. and came into being in 1956 as
Hindustan Lever Ltd. through a m erger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and
United Traders Ltd. It is h eadquartered in M umbai, India and has an employee strength of over
l6,SOO employees and contributes to indirect employment of over 65,000 people. The CO}Tlpany
was renamed in Jun e 2007 as "H industan Unilever Ltd:' Lever Brother started its actual operations
in India in th e summer of 1888, when crates full of sunlight soap bars, embossed with the words,
"Made in England by Lever Broth ers" were shipped to the Kolkata h arbour and it began an era
of marketing branded Fast M oving C on sumer Goods (FMCG) HUL's distribution covers over
2 million retail outlets acro ss India directly and its products are available in over 6 .4 million
outlets in the country. As per m arket research data, two out of three Indians use H U L products.
370 Project Work 1lllllll1q
Brands .. .
Home & Personal Care
Under this it has brands that caters to every income segment of the popular
segm ent it has brands like: Lakme, Axe, Pepsodent and many more. ion. In this
Personal Wash:
Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears
Laundry:
Surf Excel, Rin, Wheel
Skin Care:
Fair & Lovely, Pond's, Vaseline
Oral Care:
Pepsodent, Close-Up.
Colour Cosmetics:
Lakme
Tea:
Brooke Bond, Bru
Food:
Kissan, Knoor, Annapurna
Ice Cream:
Kwality Wall's
Hair Care:
Sunsilk Naturals, Clinic Plus
AyurVedic Personal & Health Care:
Ayush
FINANCIAL STATEMENTS .. .
Hindustan Unilever Ltd. - Research Center
Back to Company Page
Results
Statement
More
(<crore)
Balance Sheet
Mar'9 Dec. '07
Particulars Mar '12 Mar '11 Mar '10

Sources of Funds
217.99 217.75
Owners' fund: Equity Share Capital 216.15 215 .95 218.17

Share appl ~cation ~ o~ ey

Preference share capital
1,220.82
3,296.11 2,417.30 2,364.68 1,842.85
Reserve & Surplus
Loan Funds 25.52
144.65
Secured Loans 63.01
277.30
Unsecured Loans 1,527.10
3,512.26 2,633 .25 2,582.85 2,482.79
Total
r i '1r111•1 I W,11I·
:f11

· ~sof funds

Fixed Assets
Gross block 3,574.67 3,7 59 ,62 :3,50 ·1, ( H.1 ;1,1111 I 1:J t, (1(1!/ rJII
- - -:-revaluation reserve
Les5·
0.67 0.67 0.0 1 I U, li I (I II I

LeSS·
. accumulated depreciation l ,416.88 1,590.46 1,4 19.8 5 1 ,,:rr '1 .'JI, i, I '1 0 /JI
Net block 2,157.12 2,168.49 2,'161.44 1
1,IW CJ . 1I U/7 1 IVI

capital work-in-progress 210.89 299 .08 273 .96 I 41'J .()'1 I /J f.i (VI

investments 2,438.21 1,260.68 1,264 .08 I :J3 'J .u:i I ,'140 .IJ I

-----
Net current Assets
current Assets, Loans and Advances 6,340.40 6,494.19 5,818.89 6,040.04 ;~/10 I , I 'J
LeSS: current Liabilities & Provisions 7,634.36 7,589 .19 6,93 5.52 5,968,06 b,:J IJ;/ :11 I
Total Net Current Assets -1,293.96 -1,095.00 - 1,'I '16. 63 ~,UJU - 1, (3~ I . Ill
Miscellaneous Expenses not written

Total 3,512.26 2,633 .26

-,
2,58 2. 86 , 2,48 2.79 l ,fj ? / . I0

Notes:
Book value of unquoted investments 156.51 108.93 466.46 I 317.30 I ,36'1 .:.H,
Market value of quoted investments 2,469 .28 1,279.49 953 .68 71.09 207 .U3
Contingent liabilities 1,009 .23 836.96 468.49 1 4'17 .26 494 .46
Number of equity shares outstanding 21615.12 21594.72 21816.87 2 '1798.76 2177'1 .6:J
~ cs) I
Cash Flow
Particulars Mar '12 Mar '11 Mar '10 I Mar'9 Dec . '07
Profit before tax 3,350 .16 2,730.18 2,707 .07 3,02 5.12 2,1 84 .53

Net cashflow-operating act ivity 2,869 .56 1,890.57 3,432.37 I 2,0 28 .65 1,b80 . 11

Net cash used in investing act ivity -452.45 134.99 -1,137 .46 , 878 .19 1,02::l . 7b

Net cash used in financial activity -1,722 .32 -2, 277 .75 -2,180 .32 l - 1,330.36 - 2,92 1.:3 4

Net inc/dee in cash and equivalent 694.79 - 252.19 114.59 1,576.49 - 2 17.47

Ca~ and equivalent begin of year 228 . l 5 1,892.20 1,777.62 , 200 .86 41 8 .33

Cash and equivalent end of ye ar 922.94 1,640.01 1,892 .21 ' 1,777 .35 200 .86

Profit and Loss Account

Particulars Mar '12 Mar '11 Mar '10 Mar '09 Dec . '07
Income: Operating Income 22,118 .64 19,689 .91 17,769.12 20,504.28 '13,880 .56
Expenses: Material consumed 11,832.45 10,199.25 8,984.50 10,945 .71 7,3 80 .72
Manufacturing expenses 922.37 825 .99 498 .74 598 .71 401 .99
Personnel expe~ses 1,095.54 961 .27 936.30 1,1 52 .12 7 67 .8 1
Selling expenses 3,705.28 3,811 .55 3,262 .12 3,277 .74 2, 160 .38
Ad · ·
_ m,n,strative expenses 1,237.80 1,227.36 1,289.76 1,5 6 5.0 5 1,09 2 .23
Expenses capitalised
Co st of sales 18,793 .44 17,025.42 14,971.42 17,539 .33 11 ,804 . 13
374 Proj ect Work

Comparison on the Basis of Sales

VOLUME OF PRODUCTION

40
35
30
25
20 t
Ill VOLUME
15 IN MILLION
10 TONNES

5
0
HUL AM UL DABUR

Graphical Presentation Milestones Achieved

■ Five of H ULS leading brands - Lux,

Dove, Pears, Clinic Plus and Sunsilk
- won the Reader's Digest Trusted
Brand 2008 Award.
■ Four HUL brands featured in the
top 10 list of the Economic Times
Brand Equity's Most Trusted
Brands 2008 survey.
■ HUL was awarded the Bombay
Chamber Civic Award 2007
in the category of sustainable
environment al initiatives.
■ HUL was selected as the top Indian
company in the FMCG sector for
the Dun and Bradstreet-A merican
Express Corporate Awards 2007.
 ProJec t Work 375

Comparison of Top three Players in India

■ SALES
SALES IN CRORE

14000
12000
10000
8000
6000
4000
2000
0 DABUR
HUL AMUL

Hindustan Unilever Limited

E Revenue ■ Expenditure

20 .529

17.929

15.329

12.729

10.129 --- ---

~ ~ =- --- ---2007 2008 - 2009
--- 2010
---2009
2005 2006
376 Proj ect Work

Hindustan Unilever Limited

■ Interest ■ EBIDTA ■ PAT

3.007

2.257

1.507

757

7------------4..,_________
2005 2006 2007 2008 - 2009 2009 - 2010

HUL Price chart since 1 January, 201 O(adjusted for bonus)

350- t - - - - - - - - - - - - - - - - - - - - - . . . . : .
300 -t------------:--------------..---
250 --at- - -f---- - - - - - - --,I~-•- --
200 --1--1-~ ~ ~- --c-A..- - -j__j
150 -+------------v~- ---- -----A~ ~ - - - - - - - - - - - -
100 - + - - - - - - - - - - ' - - - - - - - - - - - - - - - - - -
50 - + - - - - - - - - - - - - - - - - - - - - - - - - -
0 --+---~----,---~----,---~---- - ~ - - ~ -~ - - ~ -

STAFF
S.No. Name Designation

1. Harish Manwani Chairman

2. Dev Bajpai Company Secretary

3. Sridhar Ramamurthy Executive Director

4. Pradeep Banerjee Executive Director

5. A. Narayan Independent Director

6. S. Ramadorai Independent Director

7. R.A. Masherkar Independent Director

8. O.P. Batt Independent Director

9. Nitin Paranjpe Managing Director & CEO

r
ProJect Work 377

AnnualTurnover ...
1he company has over 16,000 employees and has an annual turnover of around f21,736 crore
(financial year 20_11-2012). HUL is a subsi~iary of Unilever, one of the world's leading su~pliers of
FMCG (Fast MoVIng Consumer Goods) with strong local roots in more than 100 countnes across
the globe with annual sales of about ~ 46. 5 billion in 2011.
Unilever has about 52% shareholding in HUL.

Comparison on the Base of Brands Category

SALES
40 - - -- - - - - - - -- - - - - -- - ■ BRANDS
35 l----.-~1- -- - - - - - - - - -- -- - ■ CATEGORY
30 - - -
25 - --1,
20 ,____.

15 1 - - -- - ,

10 - - -.
5 - -~-,
0 L - -,-.f.._---"1-_I_~ - --,--':....__:_ :;_-..L,----,-'-- ~---<-i-
HUL AMUL DABUR

MAJOR COMPETITORS ...

(i) Procter & Gamble India: P & G India in its key segment i.e. Detergents and Personal Care.
It operates in India through three subsidiaries.
(ii) Godrej Consumer Products Ltd.: GCPL is the second largest soap player in India after HUL
with a market share of 9.2%. Personal care includes hair care products shaving cream, etc.
(iii)
Dabur India Ltd.: It is an India-based FMCG company which deals in health care, personal
care and food products.
378 Projec1 Wo, k

(iv) Colgate-Palmolive (India) Ltd.: It manufactures a range of products marketed d

Colgate.
un er th
e
(v) Marico Ltd.: It has a portfolio on high margin "Beauty & wellness':

Mission ...
Unilever mission is to add Vitality to life. They meet everyday needs for nutrition h .
, yg1ene
and personal care with brands that help people feel good, look good and get more out of life.

Innovation ...
In their scientific innovation to meet consumer needs, they will respect the concerns of their
consumers and society. They work on the basis of sound science applying rigorous standards of
product safety.

Mergers ...
(i) Erstwhile Tata Oil Mills Company (TOMCO) in April 1993
(ii) Brooke Bond Lipton India Limited in Jan. l, 1996
(iii) Pond's India (PIL) Ltd. in 1998

Acquisitions . ..
(i) Brooke Bond in 1984
(ii) Lipton in 1972
(iii) Pond's India Ltd. in 1986
(iv) Lakrne Ltd.
(v) HUL formed a 50:50 joint venture with US based Kimberly Clark Corporation in 1994-
(vi) ln 2002, Modern Foods
 Pro1ect Work 379

Challenges ...

I. Competition in Core Categories 2. Raw Material

3. Consumer Income Reduction 4. Emerging Player
::,. Advertising Expenditure 6. Price Positioning
7. Competitors focussing single category 8. Consumer Behaviour
9_ Global Exposure 10. Changing habits
I I. Confused ,vith competitors Product 12. Traditional habits
I ), . Go farther - go faster. 14. Challenge conventional wisdom
}5. Creating a different mind set 16. Make something from waste
l 7. Help to improve nation's nutrition. 18. Give life an Extra-flavour.

HUL ANA LYSIS

s-Strength
(i) Variety of Products (ii) Distribution Network
(iii) Brand Image (iv) Quality Management
(v) Innovation

W-Weaknesses
(i) Not able to compete with local competitor
(ii) Not focus on upper class population
(iii) Pricing policy is not good.

0-0pportunities
(i) Huge Market
(ii) Increasing Per Capita Income
(iii) Increasing consumption ratio
(iv) Potential for making mo re impact of Brand Image

T-Threats

(i) High class competitor

(ii) Pantene
(iii) Dabur
(iv) Babool
 380 ProJ ect Wo rk

FU TU RE PROJECTS
·t·
itio n is inc rea sin g day -by -da y; it is difficult to ma int ain leader po s1 IOn and to
As com pet . . . '
jec t called "Project Shakti" to:
fur the r str eng the n the d1stnbut1on net wo rk. HU L ma de a pro
tle me nt and po or inf ras tru ctu re.
(A) To Re ach : Sm all sca tter ed set
w lite rac y ham per s effe ctiv ene ss of pri nti ng media. Poor Media
(B) To Co mm uni cat e: Lo
& Radio.
rea ch- 500 mi llio n Ind ian lac k TV
pen etr ati on con sum pti on.
( C) To Inf lue nce : Lo w cat ego ry
an level.
are nes s: Per cap ita con sum pti on in Unilever categories is 33% of urb
(D ) Aw

Conclusion
ng internal market
is sec tor wil l con tin ue to see gro wth as it dep end s on an ever-increasi
Th spective of
and dem and for the se goo ds rem ains mo re or less constant, irre
for con sum pti on, h it ma y not be a sm oot h growth path
,
nce , thi s sec tor will grow, thr oug
rec ess ion or inf lat ion . He of the rupee. This
pre sen t wo rld wid e eco nom ic slowdown, risi ng inflation and fall
du e to the
wth in the lon g run and hir ing will con tin ue to rem ain robust.
sec tor will see go od gro Ill