Unilever to maintain profit by cutting production costs

The Jakarta Post, Jakarta

Leading consumer goods producer PT Unilever Indonesia Tbk plans to maintain last year's profit margin of 22.7 percent by cutting production costs.

The company -- which focuses on goods like soaps, detergents, personal care items and food -- said in its annual report that its operating profit soared to Rp 2.04 trillion (US$212.5 million) in 2004 from Rp 1.77 trillion in 2003.

Unilever corporate secretary Franky Jamin said after a shareholders meeting on Thursday that to maintain profit, the company would increase its production efficiency.

"This effort includes using thinner packages and improving factory logistics," he said.

Unilever president director Maurits Lalisang said despite the rising price of plastic and oil, which hit $54.67 per barrel in the London market on Thursday, the company would boost efficiency instead of raising retail prices.

The London/Rotterdam-based company, which has been operating in Indonesia for 72 years, said in its report that this year's first quarter net income reached Rp 421 billion, 46 percent higher than the Rp 376 billion in the corresponding period last year.

During the meeting, shareholders approved a dividend of Rp 80 per share, to be paid next month.

The shareholders also appointed Lasiola Ladorso as the new director of home care and Bambang Subianto as an independent commissioner.

Maurits said Unilever should expand its market to maintain high sales growth and to compete with U.S. company Procter and Gamble and local consumer goods producer Wings Corp.

"We are trying to keep annual sales growth at 10 percent," he said, adding that the effort included keeping prices competitive, launching new products and pursuing acquisition opportunities.

He said business acquisitions accounted for 13 percent to 15 percent of the company's total sales. Last year's net sales increased by 86 percent to Rp 8.98 trillion from Rp 8.12 trillion the year before.

Maurits said the company would introduce 70 new products this year, compared to 60 last year. Unilever currently sells about 500 products under 33 brands -- including Walls ice cream, Bango soybean sauce, Blue Band margarine, Sunsilk shampoo, Lux and Dove soaps and Pepsodent toothpaste.

"Seventy-nine percent of nationwide sales come from home and personal care products, while the remaining are from food and ice cream," he said. (001)