INDIA BUSINESS WORLD - JULY 2006
THE MONTH THAT WAS...

MUMBAI TO OPERATE LEVERS

Consumer heavyweight Hindustan Lever (HLL) is believed to be consolidating its operations under one roof, putting an end to its decades-old system of two power centres — home and personal care in Mumbai and foods in Bangalore .

This move will put in place a single chain of command through CEO to ensure benefit of synergies across businesses. The company is understood to be examining a plan to put one of its top-notch properties in India and home to many HLL food brands, including Brooke Bond and Lipton — the 10-acre palatial sylvan Brookefield facility in Bangalore — on sale.

The foods business, accordingly, will relocate to Mumbai. HLL officials denied any such plans.

“This information is absolutely untrue and baseless. The company does not have any plans whatsoever to sell off the Brookefield facility,” a company spokesperson said.

But people close to the decision said the company has begun toplevel discussions on handling the issue sensitively to avoid any negative HR repercussions.

For years, HLL's foods business has functioned almost as a separate company with no consensus on the growth strategy. The separation gained more importance after Brooke Bond Lipton was merged with HLL in 1996 and vice-chairman R Gopalakrishnan handled the foods business from Bangalore.

Sources said the idea was to have all divisional heads in one office with a common sense of purpose.

Top officials have blamed the separation of the foods division as one of the reasons for its poor performance. Unlike the HPC business, which has done exceedingly well in recent years, its foods business has been a nonstarter with most of its acquisitions going dud and unable to take on competition.