The Hindu : Business : Major organisational revamp at HLL

Online edition of India's National Newspaper
Friday, Apr 16, 2004

Business

Business

Major organisational revamp at HLL

By Our Special Correspondent

MUMBAI, APRIL 15. In a major restructuring, Hindustan Lever Ltd. (HLL) today separated its businesses by creating two broad divisions, home and personal care (HPC) and foods. Two managing directors will head these divisions. Arun Adhikari will head the HPC division and S. Ravindranath the foods division.

Meanwhile M. S. Banga, Chairman HLL, has been concurrently appointed Business Group President of Unilever's $6-billion HPC business in Asia, effective July 1. He will continue as non-executive Chairman of HLL's board and cease to be a wholetime employee of the company.

HLL also announced a re-organisation of its management structure — the apex being a National Management chaired by the HLL's Vice Chairman, M. K. Sharma, and comprising D. Sundaram, Director (finance & IT) and two newly appointed managing directors. "The National Management will have responsibility for HLL's performance and results and overall coordination of the divisional structure and corporate functions,'' HLL stated.

The move is part of the company's plan to reorganise its existing business units into two divisions — HPC and Foods. The newly created HPC division will integrate the soaps and detergents businesses and personal products businesses. Similarly the foods division will integrate the beverages, foods, ice cream and confectionery businesses.

However, the new ventures and non-FMCG businesses, comprising plantations and speciality exports will continue to be headed by three executive directors: Dalip Sehgal (New Ventures), Satish Dhall (Plantations), Anoop Mathur (Technology and Speciality Exports). These executive directors will report to M. K. Sharma, Vice-Chairman. Mr. Sharma will also be responsible for human resources, marketing services, corporate affairs, corporate communication, technology and legal and secretarial functions.

While continuing as non-executive Chairman of HLL, Mr. Banga will have overall leadership and responsibility for the HPC business of Unilever in Asia, covering India, China, Japan, Korea, Vietnam, Australia, New Zealand, the Philippines, Indonesia, Malaysia, Singapore, Hong Kong, Taiwan, Thailand, Pakistan, Bangladesh, Sri Lanka and Nepal. Unilever's HPC-Asia accounts for a turnover of around $6 billion. HLL accounts for about 30 per cent of this turnover. "In his combined role he will continue to provide strategic leadership and operational direction to HLL,'' a company release added.

According to a spokesman, Mr. Banga will be now based in Mumbai and Singapore.

"The new structure will simplify the organisation and provide sharper focus on key brands and categories and thereby better resource deployment. HLL will continue to harness synergies of size and scale across businesses to generate competitive advantage. The cost reduction will enable further investment in brand building. The new organisation and leadership changes will also enable the company to leverage its linkages with Unilever across Asia more effectively,'' HLL stated.

"This is an organisation for growth and based on simplicity. The restructuring reduces the touch-points in the business and focuses the organisation very well,'' said Mr. Sundaram while speaking to The Hindu. He said the management committee would be separated for the two newly created divisions. While HPC represents 75 per cent of HLL's business the foods division represents 25 per cent of the total business. "HLL's re-organisation reflects the global structure of Unilever which has two divisions, HPC and Foods,'' Mr. Sundaram added.

Further with this move, "We no longer have people who are doing dual roles in India as well as in the region. We will now have Indian management team completely focussed on HLL and a number of people would be redeployed only to look after the region,'' said the spokesman of HLL.

This dual role was one of the reasons many have pointed out earlier for the fall in company's profits recently. In the last four years HLL divested many of their non-core businesses and focussed on power brands.

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