Hindustan Lever Limited (HLL) has finally put the first phase of its proposed Rs 2 bn capex plan to develop cold storage chains, for improving its ice-cream and processed foods business, in motion. It has placed orders with air-conditioning and engineering major Voltas to source retail cold-chain components.
HLL (FY99 turnover: Rs 102 bn) – India's largest consumer products company, has a business portfolio that comprises soaps, detergents, personal products (oral care, perfumes), food products and frozen deserts. HLL has tied up with Kimberly Clarke for baby care and feminine hygiene, and with S C Johnson for household cleaning products and insecticides. The company's distribution muscle exceeds 1 m outlets throughout India.
Though HLL is the market leader in the organised ice-cream segment with brands like Kwality Walls commanding over 60% market share, the segment has been growing at a snail's pace of 7% in the past couple of years. The growth during the consolidated nine months ended September 30, 1999 was led by personal products (up 21%), soaps and detergents (up 11%), branded staples (75%), seeds (43%) and animal feeds (26%).
In a bid to increase market penetration the company has earmarked the Rs 2 bn investment plan to boost its cold storage distribution network. By this move, HLL not only hopes to consolidate its position, but is also looking at market expansion. However, for this the company will have to break the Indian consumer's mindset. In India, ice-creams are still regarded as an occasional treat and vies with chocolates, confectionery, biscuits and a host of other snacks for consumer attention. For breaking the 'ice' the company will have to position frozen desserts as an item of mass consumption.
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