Wed, 23 Jun 2010
From:
By Jeroen Molenaar
June 23 (Bloomberg) -- Unilever plans to boost the amount it spends building factories in Indonesia over the next two to three years as it adds products to fend off Procter & Gamble Co. in the world’s fourth-most-populous country.

Expenditure will “significantly increase” to about 200 million euros ($242 million), Jan Zijderveld, head of Unilever’s southeast Asian unit, said in an interview. A personal-care factory in Indonesia is among four to five plants that the maker of Dove soap aims to open in southeast Asia this year, he said.

“We’re growing fast in this part of the world,” Zijderveld said by telephone from Singapore. “Part of the challenge is to cope with this growth.”

Unilever, the world’s second-largest maker of consumer products, gets about 50 percent of its 39.8 billion euros of annual revenue from emerging markets. With P&G cutting prices in countries including China and India, the London-and Rotterdam- based company is relying on new versions of products such as a Citra body cream soap bar to keep sales growing.

“Developing markets give Unilever an edge,” said Martin Deboo, an analyst at Investec Securities in London. “If as a company you’re exposed to high growth markets, your growth is higher. That’s just simple arithmetic.”

According to a June 9 report from the World Bank, economies in developing nations will grow as much as 6.2 percent annually from 2010 to 2012, almost three times faster than high-income countries. Growth in the East Asia and Pacific region will be 8.7 percent this year and 7.8 percent in 2011, the report said.

Price Cuts

“The world is not flat,” Zijderveld said. “It’s sloping towards Asia, so many competitors are also seeing this and coming here and doubling down.”

In India, Unilever’s home and personal-care sales rose 5.5 percent in the first quarter, lagging behind the 18 percent growth in food revenue. The maker of Rin washing powder was forced to lower prices to counter price cuts on P&G’s Tide Naturals detergent. P&G, which started selling its Tide brand in the country 41 years after Unilever introduced Rin, reported a 30 percent increase in Tide shipments in that quarter.

“In tough economic times you have to be even more in touch with your consumer and understand what they want and need,” Deb Henretta, P&G’s group president for Asia, said by email.

Pricing isn’t confined to India and has been spreading to other countries in the region, particularly in Unilever’s laundry and hair categories, according to Zijderveld.

“We will not walk away from a fight,” the executive said. “But it’s one of the weapons that we have in our arsenal and it’s not the healthiest weapon. The name of the game is to grow these markets.”

New Products

Zijderveld, who joined Unilever in 1988 and has worked in Europe and the Middle East, sends sales representatives to visit 1 million shops in his region every week to market new products from Omo detergents in Vietnam to Lifebuoy soap in Australia. Unilever gets a growing proportion of its 4 billion euros of sales in southeast Asia, Australia and New Zealand from new introductions or renewed versions of brands, he said.

Three months after P&G introduced an Old Spice deodorant stick in Indonesia, Unilever responded with a new format of its Rexona deodorant lotion and stick, Zijderveld said.

Increased competition in southeast Asia is causing Unilever to react faster to customer needs. An anti-bacterial version of Surf washing powder was introduced in the Philippines this year, only five months after Zijderveld walked the slums of Manila and noticed some consumers were using anti-bacterial soap. Such a process used to take as long as two years, he said.

Key Difference’

“Speed is a key difference between the developing world and the developed world,” Zijderveld said. “We build a factory in Indonesia in seven months. Everything is fast here.”

Helped by the introduction of products such as Pepsodent toothpaste in the Philippines, sales growth in Unilever’s Asia, Africa and central and eastern European division has accelerated for three consecutive quarters and rose 7.6 percent, excluding acquisitions and currency swings, in the first quarter.

Yet Unilever has also cut prices in that division for two straight quarters and may lower them another 2.5 percent in this quarter, according to a Bloomberg survey of three analysts.

“The challenge for them is to continue to compete to preserve volume growth,” said Pierre Tegner, an analyst at Oddo & Cie. in Paris. “That’s key for them.”



News Search/Filter
Transaction Rates
13 Dec 18
Buy
Sell
AED1
3,972.59
3,972.59
AFN1
192.50
192.50
ALL1
134.11
134.11
AMD1
30.04
30.04
ANG1
8,220.35
8,220.35
AOA1
47.16
47.16
ARS1
388.37
388.37
AUD1
10,531.57
10,531.57
AWG1
8,106.70
8,106.70
AZN1
8,570.95
8,570.95
BAM1
8,454.74
8,454.74
BBD1
7,296.02
7,296.02
BDT1
173.93
173.93
BGN1
8,472.31
8,472.31
BHD1
38,705.68
38,705.68
BIF1
8.01
8.01
BMD1
14,592.04
14,592.04
BND1
9,258.75
9,258.75
BOB1
2,111.49
2,111.49
BRL1
3,784.61
3,784.61
BSD1
14,592.04
14,592.04
BTC1
48,860,189
48,860,189
BTN1
202.68
202.68
BWP1
1,358.41
1,358.41
BYN1
6,867.80
6,867.80
BZD1
7,238.77
7,238.77
CAD1
10,930.16
10,930.16
CDF1
9.03
9.03
CHF1
14,699.35
14,699.35
CLF1
602,628.43
602,628.43
CLP1
21.51
21.51
CNH1
2,124.18
2,124.18
CNY1
2,120.93
2,120.93
COP1
4.59
4.59
CRC1
24.41
24.41
CUC1
14,592.04
14,592.04
CUP1
566.68
566.68
CVE1
149.96
149.96
CZK1
641.89
641.89
DJF1
81.95
81.95
DKK1
2,223.33
2,223.33
DOP1
289.86
289.86
DZD1
122.94
122.94
EGP1
814.65
814.65
ERN1
972.94
972.94
ETB1
517.44
517.44
EUR1
16,592.61
16,592.61
FJD1
6,906.34
6,906.34
FKP1
18,421.67
18,421.67
GBP1
18,421.67
18,421.67
GEL1
5,506.49
5,506.49
GGP1
18,421.67
18,421.67
GHS1
2,930.12
2,930.12
GIP1
18,421.67
18,421.67
GMD1
294.19
294.19
GNF1
1.58
1.58
GTQ1
1,886.35
1,886.35
GYD1
69.78
69.78
HKD1
1,867.19
1,867.19
HNL1
598.03
598.03
HRK1
2,246.24
2,246.24
HTG1
191.36
191.36
HUF1
51.38
51.38
IDR1
1.00
1.00
ILS1
3,892.69
3,892.69
IMP1
18,421.67
18,421.67
INR1
203.11
203.11
IQD1
12.25
12.25
IRR1
0.34
0.34
ISK1
118.36
118.36
JEP1
18,421.67
18,421.67
JMD1
113.92
113.92
JOD1
20,563.67
20,563.67
JPY1
128.80
128.80
KES1
142.43
142.43
KGS1
212.39
212.39
KHR1
3.62
3.62
KMF1
33.71
33.71
KPW1
16.21
16.21
KRW1
12.97
12.97
KWD1
47,990.67
47,990.67
KYD1
17,508.38
17,508.38
KZT1
39.41
39.41
LAK1
1.70
1.70
LBP1
9.68
9.68
LKR1
81.31
81.31
LRD1
92.73
92.73
LSL1
1,018.28
1,018.28
LYD1
10,422.88
10,422.88
MAD1
1,536.45
1,536.45
MDL1
849.61
849.61
MGA1
4.15
4.15
MKD1
269.54
269.54
MMK1
9.22
9.22
MNT1
5.94
5.94
MOP1
1,812.19
1,812.19
MRO1
40.87
40.87
MRU1
400.88
400.88
MUR1
426.04
426.04
MVR1
944.46
944.46
MWK1
19.60
19.60
MXN1
727.15
727.15
MYR1
3,487.49
3,487.49
MZN1
241.19
241.19
NAD1
1,021.85
1,021.85
NGN1
40.08
40.08
NIO1
450.37
450.37
NOK1
1,702.39
1,702.39
NPR1
126.66
126.66
NZD1
10,007.93
10,007.93
OMR1
37,901.21
37,901.21
PAB1
14,592.04
14,592.04
PEN1
4,347.39
4,347.39
PGK1
4,339.96
4,339.96
PHP1
277.38
277.38
PKR1
104.94
104.94
PLN1
3,866.96
3,866.96
PYG1
2.45
2.45
QAR1
4,007.70
4,007.70
RON1
3,565.12
3,565.12
RSD1
140.26
140.26
RUB1
219.71
219.71
RWF1
16.67
16.67
SAR1
3,889.44
3,889.44
SBD1
1,827.80
1,827.80
SCR1
1,069.73
1,069.73
SDG1
306.87
306.87
SEK1
1,605.98
1,605.98
SGD1
10,634.75
10,634.75
SHP1
18,421.67
18,421.67
SLL1
1.73
1.73
SOS1
25.11
25.11
SRD1
1,956.56
1,956.56
SSP1
112.01
112.01
STD1
0.69
0.69
STN1
677.12
677.12
SVC1
1,667.48
1,667.48
SYP1
28.33
28.33
SZL1
1,025.44
1,025.44
THB1
445.83
445.83
TJS1
1,548.96
1,548.96
TMT1
4,157.30
4,157.30
TND1
4,974.29
4,974.29
TOP1
6,367.78
6,367.78
TRY1
2,728.37
2,728.37
TTD1
2,164.78
2,164.78
TWD1
475.18
475.18
TZS1
6.34
6.34
UAH1
526.33
526.33
UGX1
3.92
3.92
USD1
14,592.04
14,592.04
UYU1
452.82
452.82
UZS1
1.75
1.75
VEF1
0.05
0.05
VND1
0.62
0.62
VUV1
131.59
131.59
WST1
5,615.15
5,615.15
XAF1
25.29
25.29
XAG1
215,137.81
215,137.81
XAU1
18,184,593.24
18,184,593.24
XCD1
5,399.36
5,399.36
XDR1
20,270.16
20,270.16
XOF1
25.29
25.29
XPD1
18,436,403.95
18,436,403.95
XPF1
139.04
139.04
XPT1
11,731,920.17
11,731,920.17
YER1
58.29
58.29
ZAR1
1,033.67
1,033.67
ZMW1
1,219.45
1,219.45
ZWL1
45.26
45.26
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services