Unlike Brooke Bond Lipton India Ltd, Unilever has decided not to merge Pond's with the group company, Hindustan Lever. As a consequence, Lever's personal products thrust in India will be led by three companies, each concentrating on its main strengths.
While Hindustan Lever will sell dental and hair-care products, Lakme-Lever will focus on colour cosmetics and fragrances, and Pond's on skin care products like creams, lotions and talcum powder.
Top Lever sources said the decision was taken after much internal debate and discussion. One view was for the merger saying it would create a
mega-Unilever company in India. The other contention was that
the merger was not really necessary, and, if it happens, it would dilute Pond's strengths in its core products.
"Whatever synergy we wanted has been achieved through the merger of the sales forces. Through this, we have plugged a major weakness of Pond's which was the lack of distribution reach in northern markets," Lever sources said.
Pond's has already built up its strength in skin care products and today commands higher marketshare compated with other players such as Lakme in certain segments like cold cream and face cream. It is also a strong player in the talcum powder sector.
"Pond's also has a loyal shareholder base in the south and it would be hurt if we rob it of its identity through merger," added Lever sources.
The merger would not actually create synergies as the businesses of the two companies are different. Though producing personal care products, Lever is dominant in dental care products like toothpastes and toothbrushes and also in hair care line like shampoos and hair oil.
Lever has only one brand, Fair & Lovely, which fits with the Ponds portfolio. Whether it would remain with Lever or be transferred to Pond's is not known. Lever sources said nothing has been decided on the issue so far.
Retaining a separate identity for Pond's means Unilever's
personal products will be
sharply focused in three distinct areas: skin care; colour cosmetics and fragrances; dental care; and, hair care.
