Mumbai, Feb. 20: Hindustan Lever — the Rs 12,103-crore desi multinational — broke with the 55-year-old hoary tradition last year when it brought in an expatriate — Douglas Baillie – as the chief executive.
It broke it again today when it decided to rename itself as Hindustan Unilever Ltd as it chose to derive more benefits by sporting its parent’s name. But for form’s sake, it decided to keep the word ‘Hindustan,’ remaining the only one in the Unilever family that still strives to assert its individuality. All other companies call themselves Unilever followed by the country’s name.
The current name was adopted in 1956 after the amalgamation of Hindustan Vanaspati Manufacturing Company Ltd and Lever Brothers India Ltd. At a board meeting held today, the directors proposed to change the name of the company to Hindustan Unilever Ltd subject to shareholders’ approval. HLL will hold an annual general meeting on May 18 where the proposal will be placed before the shareholders.
Explaining the reasons for the move, M.K. Sharma, vice chairman of HLL, said the company looked to gain numerous benefits from the change. “Unilever has a global size and scale. As tariffs go down and global sourcing rises, and as we carry the Unilever name, it will be easier for us to go to suppliers and seek same rates as Unilever. Moreover, when it comes to exports, the Unilever name will make sourcing from India more acceptable,” Sharma said.
The HLL vice chairman added that another front in which the Unilever name will prove handy, will be with regard to attracting talent. “The Unilever name is a better known name in developed markets and it will be easier for us to seek talent internationally,” he said.
Last year, Manwani had said HLL was looking to attract more expatriates. Replying to a specific query on whether the name change would have any impact on India’s rural markets, Manwani said that in these areas, the FMCG giant was known by the brands it sold.
“HLL commands a goodwill in these markets and it is our intention not to lose it,” he added. Manwani also revealed that the company would not have to pay any royalty due to the change.
“The company believes that the proposed name change provides optimum balance between maintaining the heritage of the company and the future benefits and synergies of global alignment with the corporate name of Unilever,” a statement said. Market circles believe the change may be a prelude to Unilever raising its stake in HLL.