Unilever in India: Managing Working Capital (Page 2)

Abstract

Unilever''s Indian subsidiary, Hindustan Lever Limited (HLL) is the country''s largest FMCG (fast moving consumer goods) company. It has brands spread across 20 distinct consumer categories. HLL holds a place of pride in the Unilever global system. In India, HLL is known for its tight management of working capital and the company has been operating with a negative working capital since 2000. But the management realises that as competition intensifies, there is still scope for improving operational efficiency and cutting working capital needs.

<<Previous Page

BACKGROUND NOTE contd...


After India's economic liberalization started in 1991, alliances, acquisitions and mergers became easier. In one of the most celebrated events in India's corporate history, HLL acquired Tata Oil Mills Company (TOMCO), effective from April 1, 1993.

By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 following an international acquisition. In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India. Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond in the same year.

In July 1993, Brooke Bond India merged with Lipton India, to form Brooke Bond Lipton India Limited (BBLIL). The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972. In 1977, Lipton Tea (India) Limited was incorporated. Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in 1986. In 1994, BBLIL launched the Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with Kwality Icecreams. In 1995, the Milkfood 100% Icecream marketing and distribution rights too were acquired. BBLIL merged with HLL, with effect from January 1, 1996. In 1998, Ponds India was merged with HLL. With this merger, HLL became owner of the highly popular Pond's Dreamflower Talc, Pond's Dreamflower Magic, and Pond's Sandal Talc....

        Case Code   FINA009
   Case Length    10 Pages
              Period    1888 - 2004
 Organization     Unilever, Hindustan Lever Limited (HLL)
        Pub Date     2004
Teaching Note    Not Available
     Countries    India
      Industry    Packaged Goods

Issues

Unilever in India, Managing Working Capital

Unilever in India; Hindustan Lever Limited (HLL); Working capital; Banga; Fast moving consumer goods; Market value added; Economic value added; Financials; Balance sheet; Profit and loss; Dell; Finance case; Operational efficiency; Working capital needs

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.