Hindustan Unilever (or HUL) is Unilever's main operating business in India. It is the country's biggest consumer goods company, and far and away the leading advertiser. HUL inhabits virtually every sector of the consumer goods market, including several not occupied by Unilever in other markets, such as preserves and bakery products. International brands such as Ponds, Dove and Surf are supported by local jewels Lakme, Fair & Lovely and Kissan. In addition to FMCG products it is the country's biggest exporter of tea. It is widely considered to be one of India's best-run businesses, although performance slowed dramatically between 2000 and 2004, prior to restructuring. Unilever controls a majority stake in the company, but the remaining shares are publicly quoted in India.
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Free for all users | see full profile for current activities: Unilever's business in India dates back well over 100 years. It was one of the first markets targeted in the late 19th century by William Hesketh Lever, after the formation of Lever Brothers. He appointed several agents to handle the company's products, among the biggest of whom was what became known as the North West Soap Company. The company's first soap brand, Sunlight, was imported from 1888, and was followed by Lifebuoy (from 1895), Pears, Lux and Vim. Later, in 1918, a group of Dutch manufacturers began distribution of Vanaspati, a form of margarine, manufactured locally under license.
In 1925, Lever Brothers took control of the North West Soap Company. Following Lever Brothers' subsequent merger with Margarine Unie in 1930, the company set up its first local subsidiary, Hindustan Vanaspati Manufacturing Company to make margarine. Lever Brothers India was formed two years later for soaps and detergents, followed by United Traders Ltd in 1935 to market personal care products. As Lever Brothers' various subsidiaries developed their business in India, other British and American companies were also active in the country. Among them were Brooke Bond & Co, Thomas J Lipton and Pond's, all of which subsequently came under the Unilever umbrella. Lipton was harvesting tea in India from the end of the 19th century, and Brooke Bond & Co was marketing Red Label in the country from 1903, setting up a local business in 1912. Pond's established an Indian business in 1947.
Unilever's global portfolio continued to swell during the 1940s and 1950s. In 1956, it merged its three Indian subsidiaries to form Hindustan Lever (HLL), and floated 10% of the business on the Indian stock exchange. The group later floated additional equity to comply with new Indian regulations which limited foreign ownership of local companies to 40%. Unilever was granted special dispensation by the Indian government to retain a 51% stake in the business.
Deregulation of the Indian market allowed HLL to acquire not only Western-owned companies but also to become directly involved in Indian-owned businesses. Unilever acquired the local interests of Lipton and Brooke Bond in 1972 and 1984 respectively. In 1993, HLL merged with rival Indian detergents business Tata Oil Mills Company, at the time the biggest takeover in Indian corporate history. In 1995, the group formed a joint venture with another Tata company to market its Lakme cosmetic products. Three years later, HLL acquired Tata's 50% stake and took over full ownership of the brands.
Unilever's other subsidiaries were also actively consolidating their local business through acquisition. Brooke Bond acquired instant coffee company Kothari General Foods in 1992, followed by Dollops Ice Cream (from Cadbury) a year later. Also in 1993, the group merged all its tea interests, including Lipton and two plantations, under the Brooke Bond umbrella. The new Brooke Bond Lipton India went on to form strategic alliances with two other leading ice cream manufacturers, Kwality and Milkfoods, before the whole business was absorbed into HLL in 1996. Pond's India was folded into HLL two years later. Industrial Perfumes, which had been jointly owned by HLL and the Dutch half of parent Unilever, was consolidated into HLL in 1999.
At the end of 1999, parent Unilever agreed to acquire a 65% stake in leading Indian tea producer Rossell Industries, while HLL would acquire an additional shareholding in Rossell itself. Under laws established in the 1970s, foreign companies with wholly owned subsidiaries in India were obliged to sell 24% of their equity to local partners, and were prohibited from buying more than 24% of Indian-owned companies. Unilever, which has a 60% share of the huge Indian tea market, initially attempted to reduce its reliance on tea auctions by acquiring more plantations. These and other commodities businesses were sold off in 2004 and 2005 to allow the company to concentrate on sales and marketing rather than production. Early in 2000, HLL acquired from the Indian government a 74% stake in its Modern Foods Industries, which makes and distributes bread nationally.
Reflecting the slowdown in performance, the group reorganised its management structure in 2005, following the appointment of HLL chairman Vindi Banga to the position of global director of Unilever Foods. Zimbabwe-born Doug Baillie was appointed as CEO, becoming the group's first non-Asian head since the 1950s. Baillie was in turn succeeded three years later by Nitin Paranjpe. See full profile for current activities
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