India tech stack will help stimulate growth: HUL's Nitin Paranjpe

HUL executive chairman says FMCG continues to be strong in India

The fast-moving consumer goods (FMCG) sector continues to be very strong in India, Nitin Paranjpe, non-executive chairman at Hindustan Unilever (HUL), told shareholders at its annual general meeting on Friday.

He added that the country is becoming prosperous, more people are getting into the consumer class and discretionary income is increasing.

“Our per capita consumption is quite low. The FMCG categories per capita consumption is about $50. If you take Southeast Asian nations like Indonesia, per capita consumption is around $250, and for Thailand, it would be around $350. It gives you a sense of the sort of opportunity that we've got ahead,” he said.

He added that there will be opportunity as people start premiumising and urbanisation begins. All of these are opportunities for growth in the medium to long term.

While talking about the demerger of the ice cream business, Paranjpe told shareholders that the team in India will assess the situation and have discussions with the board. And, the board will form a view on what is in the best interest of the company.

“We will have discussions with the Unilever global team and arrive at a decision, which will be in the best interest of each well. That decision is yet to be made,” he said while answering questions of shareholders.

This comes on the back of Unilever announcing the demerger of its ice cream business.

He also said that HUL’s intensity of innovation will increase, going forward. 

While talking about last year’s performance, Paranjpe said, “Material inflation tapered to low single digits. Some places it actually became negative and we had to pass on the benefit of this to our consumers. And, volume recovery is likely to happen over a period of time.”

In his opening speech — Developing Human Capital for a Growing India — he said India has set itself an ambitious target of becoming a $10-trillion economy and grabbing the slot of the third largest economy by 2030.

He pointed out that the ambitious goal will require the nation to step up its growth rate from a historical average of around 7 per cent compound annual growth rate (CAGR) over the last decade, to over 8 per cent. 

He said while achieving this target is not easy, it is much needed and certainly possible. 

Paranjpe said, “We have momentum on our side. We have been one of the fastest growing large economies in the world over the last decade.”

He added India’s growth rate is much ahead of the largest economies — the US and UK at 2 per cent, Japan at 1 per cent and almost at par with China (7 per cent).

He also pointed out that India’s investments made over the last decade have created the foundation of what is already among the best digital public infrastructure in the world. This is driving financial inclusion and stimulating economic growth.