Mumbai, Feb. 10: Unilever Plc/NV swept away its dual-management structure on Thursday as two Indians broke into the top league of the Anglo-Dutch giant that makes everything from Dove soap to Knorr soup.
What ended was a 75-year history of two chairmen and two boards. Co-chairman Antony Burgmans will be non-executive chairman while Frenchman Patrick Cescau, the UK co-chairman, becomes group chief executive.
M. S. Banga and Harish Manwani from Hindustan Lever (HLL) have leapt to the Unilever Executive, the highest decision-making body within the $49-billion group.
In an announcement made in London, the company said Banga, now group president of Unilever's home & personal care business in Asia and non-executive chairman of Hind Lever, will be president of the foods division. Manwani was named president for Asia and Africa.
Unilever's 2004 net profits before exceptional items rose 1 per cent to 3.97 billion euros ($5.07 billion), which represented a 4 per cent rise when taken at constant exchanges rates.
The group said it would focus on improving total shareholder returns and reconfirmed its aim to be in the top third of its peer group on this measure, while it expected an improvement on its return on invested capital.
Unilever has suffered nearly two years of sluggish sales and earnings growth which culminated in September in a profits warning indicating underlying earnings would grow less than 5 per cent on a constant currency basis.
The results showed underlying earnings per Unilever NV share growing 5 per cent to 4.22 euros at constant currency in 2004, but just 2 per cent at current rates.
'I am excited to have been entrusted with the new challenge. These changes are designed to make us more competitive in the market. The new leadership gives us the ability to truly leverage our scale and to service our customers more effectively. The presidents will concentrate on brand management and activation, which have been driven always by consumer needs and aspirations,' Cescau said after the new structure was made public.
In India, the elevation of Banga and Manwani is seen as another example of how Indian managers are moving up the management ladder in multinational corporations. Both men, on the right side of 50, have been picked from a subsidiary that gives Unilever less than 6 per cent of its global revenues but now occupies more than a quarter of the seats in the global major's control room.
'I feel very privileged at being part of the Unilever Executive as president (foods),' said Banga, who joined as a management trainee in 1977 before becoming chairman of Hind Lever in 2000 and group president of Unilever's home & personal care business in Asia last year.
Manwani joined Hind Lever in 1976 and performed key sales and marketing functions before joining the board in 1995 as business director (personal products).
In 2004, he was asked to head Unilever's home and personal care business in North America. The two will now be part of Unilever CEO Patrick Cescau's power pack. On their shoulders lie the responsibility to push the global major to keep pace with Procter & Gamble, its arch rival that recently swallowed Gillette in a $57-billion deal.
Banga is the fourth Hind Lever chief to have risen to the top echelons of Unilever management. Others who made it are K. B. Dadiseth (in 2000), T Thomas (in 1980) and Ashok Ganguly in 1990.
In his new assignment, Manwani will have to help Hind Lever reverse stagnating sales and cope with a painful revamp that has put many brands and businesses on the chopping board.