The fast-moving consumer goods (FMCG) behemoth Unilever’s restructuring of business will work in favour of Hindustan Unilever Ltd (HUL), the Indian unit's CEO and MD, Sanjiv Mehta, told Moneycontrol in an interview.
“I am very bullish about the new Unilever structure; it would be right for Unilever and it would be good for HUL,” said Mehta.
Unilever had announced the restructuring of its business in January, under which the company will move away from its current matrix structure and will be organised around five distinct business groups – beauty and wellbeing, personal care, home care, nutrition, and ice cream. The proposed new organisation model will result in a reduction of 15 percent in senior management roles, while the junior management roles will be trimmed by 5 percent, equivalent to around 1,500 roles globally, the company had informed in a press statement.
Soon after this announcement, Nitin Paranjape, a former HUL CEO, was appointed chairman of HUL, a post earlier held by Sanjiv Mehta, along with the roles of chief executive officer and managing director. Paranjape has also been appointed chief people officer and chief transformation officer of Unilever starting April, and will lead the company as it goes through a major restructuring. Globally, Unilever will appoint five business leaders for each of these business groups, reporting to the top management.
(Read here: We are a Rs 50,000-crore company but HUL’s best is yet to come: CEO and MD Sanjiv Mehta)
According to Mehta, while in most of the countries where Unilever operates, businesses will go through a restructuring, following which five business segments will emerge, India will be a bit different.
“We are a large company, one of the fastest growing companies and a listed company. Here, the executive leadership of the business will remain with me,” said Mehta.
“We will align to the five business groups, but unlike in most parts of the world, we will have three leaders like today leading the business,” he added.
Post restructuring Hindustan Unilever’s beauty and personal care division, shared Mehta, will be called beauty, well-being and personal care and will be led by Madhusudhan Rao, homecare will remain homecare and will be led by Deepak Subramanian. While Unilever has broken the foods and refreshments division into nutrition, and ice cream, the division will remain intact at HUL and will be headed by Srinandan Sundaram, said Mehta.
The restructuring, however, will help HUL as it would speed up the decision-making at the parent company and make way for better innovation, said Mehta.
Watch: Sanjiv Mehta Interview | HUL Boss On Inflation, Competition, & More
Unilever’s move to make changes in its structure and leadership team follows a significant stake acquisition by Trian Partners, Nelson Peltz’s activist hedge fund, as reported by Reuters last month. According to reports, the hedge fund, known for pushing big firms such as General Electric (GE), Mondelez, and Procter & Gamble (P&G) to improve and simplify their operations, has been pressuring Unilever as well. Trian Partners had called for changes in another consumer goods firm P&G in 2018 and won the battle. The restructuring exercise, which will bring about a significant change in how the organisation has been run for the past two decades, will result in cost savings of €600 million, the company’s management said, while addressing a post-earnings investor call in February.
(Also read: FMCG to see further pricing action: Sanjiv Mehta, CEO and MD, HUL)
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