Financial Daily from THE HINDU group of publications
Friday, Mar 21, 2003
Financial Daily from THE HINDU group of publications Friday, Mar 21, 2003 |
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Corporate
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Outlook Marketing - Strategy Ice-cream biz: HLL to focus on six cities Our Bureau
MUMBAI, March 20 FMCG major Hindustan Lever Ltd (HLL) is expected to turn around its ice-cream business in 2003, a senior official of the company said. In a bid to drive growth, the company will focus on six cities - the four metros and Bangalore and Hyderabad. "Two-thirds of our ice-cream turnover comes from these six cities,'' Mr S.H. Mehta, Executive Director, Ice Cream, HLL, said. HLL was able to halve its losses in this business in 2002. The strategies which helped the company achieve this would continue in 2003 to facilitate its becoming profitable. During the April-December 2002 period, HLL reduced its losses to Rs 6 crore from the year-ago period's Rs 20 crore, Mr Mehta said. According to him, the company's decision to shift its business from a commodity model to a product model was an important strategy for turnaround. In the relaunched version of the Rs 80-crore Max brand, four products have been added - Mango Tango at Rs 7, Rainbow at Rs 10, Super Twister at Rs 15, and Regular Twister at Rs 10. Currently, Max accounts for one-fifth of the turnover. On the price advantage some of the competitors offer, he said: "We do not want to get into a price war." However, he views the entire impulse product range as competition. "Ice-cream's competitor is Indian mithai, chocolates, soft drinks or any other impulse product.'' The company has been working on supply chain efficiencies as cited by the Chairman, Mr M.S. Banga, at previous press conferences. From 40 ice-cream factories, HLL has only six now. The company is now banking on a harsh summer to drive its business. The ice-cream business in India is worth around Rs 1,000 crore, of which Rs 650 crore is accounted for by the organised sector. HLL accounts for Rs 210 crore, according to Mr Mehta.
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