'Our strategy is not dependent on acquisitions'
Hindustan Unilever’s top line for the quarter and the year ended March 2011 was led by strong volume growth of 13 per cent. In an interview with Viveat Susan Pinto, Chairman Harish Manwani talks of the way forward for the Rs 19,401-crore firm. Edited excerpts:
What has helped you sustain volumes at a time when demand is moderating?
It is about great innovation, the right level of investment and great execution. In short, innovation, investment and execution have been key. I wouldn't be able to say whether the percentage of growth is sustainable, but making sure we deliver consistent growth, which is profitable and competitive, is what we aim for. In a volatile cost environment, you have to manage the business better. I would like to believe we are doing well on that count.
Will you take a price rise in the future?
The most important thing for us is to provide great consumer value. Of course, input costs are going up. Our first and primary effort is to make sure how much of that we could offset with cost-effective measures. Making sure that we provide the right kind of innovation to improve the value, and then, if we have to take some judicious price increases, we will. But always in a context that we have to give consumers the best value.
HUL has consistently said that investing in the core and categories of the future are its imperative. Which are the categories you have identified?
There are many. For instance, the work we have done with soupy snacks under Knorr or the work we are doing in deodarants or hair conditioners or shampoos or fabric conditioners. All of these are some of the examples we are doing in emerging categories.
Unlike other consumer goods companies, HUL has not done an acquisition for some time now. Are you likely to revisit this strategy going forward?
We believe we have a large enough portfolio within HUL and Unilever to keep us growing for a long period. Our strategy is not dependent on acquisitions at all. If there are any good acquisition opportunities, and if we have the balance sheet, we will go for it. We are constantly looking at opportunities which are strategic and can accelerate our pace of growth.
What has prevented you from taking the plunge?
There has to be value in the potential target. We have found none so far. Out-of-home is increasingly becoming important for HUL.
You began with Lakme salons, then Swirls ice-cream parlours. Now you have six Bru World Cafes. Which other segments will you take out-of-home?
Out-of-home is a very significant opportunity for us, which is why you find us operating there. Not many companies have the end-to-end capability that we are building to boost out-of-home and in-home consumption. We intend to capitalise on this. Wherever there are opportunities of consumption we will be there.
Infrastructure space has fallen out of favour for investors, both public and private. But the sector could bounce back in the next 2-3 years, ...