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Unilever South Africa : company profile

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Unilever South Africa has reigned for several years as the country's foremost packaged goods company, as well as one of the country's leading advertisers, with an average spend in excess of ZAR 1.5bn. Until recently it operated through two local units, Unilever South Africa Home & Personal Care (HPC), and Unilever South Africa Foods. The latter was a joint venture with the investment company of South Africa's Rupert family (who also control luxury goods giant Richemont). The two businesses were merged during 2007 into a single entity in which Unilever had a 74% holding, while the Rupert family's Remgro controlled the remaining 26%. In 2017, the partners agreed to end that arrangement with the transfer to Remgo of Unilever's South African margarine business.

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Competitors

See South Africa Index for other companies

Brands & Activities

The group's food business manages international brands including Knorr, Hellmann's, Lipton Tea, as well as local favourites Glen and Joko teas. The local ice cream brand is Ola, although it shares the Heart Brand logo with Unilever's other worldwide ice cream businesses, and markets international products including Magnum, Cornetto and Solero.It is the local #1 with around 33% value share (Euromonitor 2014), ahead of Dairymaid Nestle (with 29%). The group has gradually reduced its exposure to local food brands. Knorrox stock cubes, Rajah curry powder, Robertsons Herbs & Spices and Marvello spread are now sold mainly to commercial customers through the local arm of Unilever Foodsolutions.

A slight shadow has been hanging over the group's local margarine business since 2014 as a result of allegations that Unilever and palm oil suplier Sime Darby colluded to fix prices and agreed not to compete for each other's customers for at least a ten-year period. In 2017, South Africa's competition commissioner recommendeda fine equivalent to 10% of local turnover.

In 2017, in the first step towards a disposal of its global margarine and spreads business, Unilever agreed to transfer local ownership of Rama, Stork and Flora margarines to minority shareholder Remgro, in return for the latter's minority shareholding and R4.9bn in cash.

In the HPC business, the group's household products include the long-established Sunlight brand, which now encompasses a range of laundry detergents and conditioners, dishwashing products and even bath soap. It is supported by the Omo, Skip and Surf detergent portfolios, fabric conditioner Comfort and cleaning products Domestos, Vim and Handy Andy (still the local name for Cif).

Personal products include Dove, Lux, Vaseline and Pond's, as well as the Organics haircare range and Lifebuoy soap. Shield is the local name for the deodorant product marketed elsewhere by Unilever as Rexona or Sure. International brand Sunsilk was marketed in South Africa mainly as an ethnic haircare product, and it was superseded in the later 2000s by Motions, inherited from Alberto Culver, along with Tresemme and VO5. Dawn is a local jewel, the market leader in the country's hand and body skincare segment; another local jewel is nappy rash cream Fissan. Unilever still markets men's deodorants in South Africa under the well-established Brut brand, in addition to international brands Axe and Impulse. Unilever remains active in oral care in South Africa with the Close-Up, Mentadent and Pepsodent brands. The group's private label cosmetics manufacturing division, Quality Products, was sold in 2005.

The group doesn't split out revenues for South Africa, but sales are around €1bn. In 2013 it announced plans to invest R$1bn in the construction of a new factory to support further growth in Unilever's local performance. The group also sponsors a local business school and thinktank, the Unilever Institute of Strategic Marketing.

Background

As a former colonial outpost of Great Britain, South Africa was among the first international markets for the original Lever Brothers company. Sunlight soap was first imported into the country in 1890, and a local office was established in 1904. The first Lever factory opened in Durban in 1911. As in other markets, the Unilever umbrella came to cover numerous separate operating units over the years as a result of international and local acquisitions. The process of consolidation began when food group Van den Bergh & Jurgens and tea business Lipton were merged as Unifoods in 1993. Lever Ponds was formed from the merger of the group's Lever Brothers household care and Elida Ponds personal care subsidiaries in 1996.

The group's acquisition of Bestfoods in 2001 added a joint venture with Robertsons Foods, already a local licensee in South Africa (as well as Israel) for several Unilever brands. Unilever Bestfoods Robertsons South Africa was created in 2002, as a 60/40 joint venture with Remgro, the investment vehicle of South Africa's Rupert family (also owners of Richemont). The Bestfoods and Robertsons names were phased out in 2003 in keeping with the group's international rebranding.

Last full revision 6th July 2017

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