Cescau sees huge retail opportunity

India should be to Unilever what China is to others: Unilever CEO.

Patrick Cescau, Unilever's chief executive, is jetting around the world these days to make clear the direction that he wants the company to take.

The 56-year-old Frenchman, who has worked at Unilever all his life, says he wants to soak in India's unbelievable success story, where consumer spending could shortly overtake that in developed countries in purchasing power parity.

"India has gone much beyond call centres. India should be to Unilever what China has been to other global companies," Cescau said at a press briefing here today.

He wanted Hindustan Lever (which is among the top five operations in emerging markets) to not only increase its share in the company's global revenue, but also be "a net provider of talent, ideas, and technology, from being a net recipient so far."

The company would invest more in R&D operations in India to make its business grow through innovation.

The company's Indian operations are currently growing at 8 per cent and eight out of its 10 top products are market leaders in their respective segments.

Cescau said he wanted it to grow manifold, so that emerging markets contributed more than 40 per cent to Unilever's current sales revenue.

The potential for growth in India was substantial at every level of the economic pyramid and particularly at the base, where the company had long-standing strength and marketing expertise, he said.

Terming the emergence of huge retail chains in India as a great opportunity, he said Unilever had had a great relationship with the Wal-Marts of the world. The company was the number two supplier to Wal-Mart globally and was among the top three suppliers to the rest of the global retail chains.

"It's a win-win situation for both the parties. We get the advantage of scale, while modern trade likes to do business with national market leaders like us. The growth of retail chains hasn't had a negative impact on companies like Unilever. So I don't think the situation would be different in India." Partnership with retailers was the key, he added.

The company saw a huge potential for its foods business and was looking at both organic as well as inorganic growth.

Cescau admitted that margins were a problem because of the huge rise in input costs, but the top management was willing to fight to death for market share. "No one wants to play for a draw. I am happy that the company has put aggression in the marketplace back on its agenda," he said.

Unilever also has a plan to save ¤1 billion ($1.3 billion) in costs. There had been a strong improvement in productivity and savings of about ¤200 million a quarter, though margins had not improved because of rising raw-material costs, Cescau said.