HLL to finalise restructuring soon

The firm’s shares, which once had a weightage of over 18 per cent in the main Mumbai index, are now off 37.6 per cent from a year 2000 high of Rs 324.90. The share now has a weightage of around 14 per cent in the index. HLL shares were up 2.3 per cent at Rs 201.95 on Tuesday while the main Mumbai index was down 0.26 percent.

NEW AREAS: "We are extremely clear that we will move into new areas only where we can leverage our core competencies," Banga said. The exercise to identify new business areas is running parallel to another exercise, which focuses on pruning HLL’s 110-strong portfolio of brands. "We could also dispose of some brands or migrate others to larger brands," Banga said.

The exercise is similar to the one launched earlier this year by Unilever which aims to focus the global giant on 400 of its core brands. "We’re at a very advanced stage of the exercise and should be done by early 2001," Banga said.

NOT JUST MARKET SHARE: Banga rejected analysts’ opinion that the market for HLL’stop products, including soaps and detergents, was saturated and played down a loss of market share in some segments during 2000.

"It’s a matter of mindset, and how you look at it. For instance, our share of shampoos is 70 per cent, but our share of hairwash occasions all across the country is less than five per cent," he said, referring to the share in the number of times people wash their hair, including using indigenous products.

"The market is unfortunately fixated on market share while the much bigger opportunity is market growth, the development of the market," he said. HLL’s Finance Director D Sundaram told Reuters: "In personal washes (soaps) we will match low prices where it is called for. You can expect one or two more very powerful ideas soon in the category."

Sundaram said there would be more product offerings in hairwash and the effect of these launches would be seen in the second or third quarter of 2001. "We want to see something like 15-20 percent of our pricelist from innovation at any point. That means you renew your price list every five or six years," Banga added.

RURAL BLUES, NET HOPES: HLL has been hit hard by external factors – a reduction inspending in rural areas, where farmers are facing a glut in wheat supplies and poor prices for their grains. In such a tight situation, HLL is intent on using the Netto maximise profits.

"We will invest about Rs 1 billion a year on e-ventures, 80 per cent of that on business to business (B2B)," Banga said. "We’re investing heavily in B2B because our past experiencewith connectivity has given us huge margin improvements." The company is hoping that better links, through Internet, with its raw material suppliers and stockists would lead to higher cost savings and thereby higher margins.