Mumbai, April 15: Hindustan Lever, the country’s largest fast-moving consumer goods (FMCG) company, today announced a change of guard and an organisational restructuring.
M.S. Banga, chairman and managing director, will no longer have an executive role. He will become group president of parent company Unilever’s $6-billion home and personal care business in Asia from July 1 and will be non-executive chairman of Hindustan Lever.
The company created a new top management team — called National Management — to be headed by vice-chairman M.K. Sharma.
Under the restructuring that telescopes five businesses into two, the home and personal care division will integrate the detergents and personal products business. The second division will integrate beverages, foods, ice creams and confectionery.
“The two divisions will operate with considerable autonomy,” the company said.
Hindustan Lever has been locked in a bruising price war with arch rival Procter & Gamble in detergents and shampoo.
The drastic recast comes at a time when FMCG companies as Lever have found their profit margins badly crimped. They have been forced to resort to price and promotional discounts in a desperate effort to ratchet up sales and profits.
In the three months ended December 2003, the company recorded a small profit growth while net sales dropped.
Analysts said the leadership change indicated the company was trying to groom a second line of management.
Under Banga, the company had been consolidating its businesses and focusing on its 30 power brands. While the core branding strategy has worked well till now, new ventures like ayurvedic healthcare products and health spas have not been as successful.