In his opening remarks at the Taj Mahal Hotel in Mumbai, site of last November's terrorist attacks, where he was also trapped, Unilever CEO Paul Polman said: "Nobody should give in to such threats."
For Polman, 52, the first 'outsider' to the firm to take charge at Unilever in almost a century, it was his first interaction with the Indian media after becoming the CEO.
The Dutchman is putting that courage to good use in Unilever.
"Recession can't be an excuse for business to go down. Rather, the crisis gives me an opportunity to set the bar higher." Polman added that he expected the tough economic environment to continue for at least 18-24 months.
Terming himself a 'realistic optimist', Polman, here on a two-day trip, spoke of taking the learning and innovations from India to Unilever's other markets, as the company prepared to beat the downturn.
India, he said, was leading the global markets with innovations in Fair & Lovely and the Ponds skin lightening categories. The market here was also being used to develop the Pureit home water purifier system.
"We will develop the Pureit brand here and then expand it globally. I see great potential for the country to develop tea brands here as well," said Polman, while stressing on the company's mantra: "We need bigger, better innovations faster."
He said he was struck by the optimism in this country.
"When I told my Indian executives that we have to double our business growth, no one in the room looked at me in disbelief." Heartening, as the Anglo-Dutch giant depends on emerging markets for almost half its worldwide sales. The Indian optimism, he said, also made him 'energised enough to think that Unilever was in a much better situation to face this recession than at any time in the history of this company.'
The deeper understanding of consumers at the bottom of the pyramid in countries such as India was helping the company face the global slowdown, when consumers were looking for better value and not only price, he said.
Acknowledging that downtrading was happening mostly in the premium segment, Polman said Unilever's presence across all price points put it in a unique position to face such situations. "If we have Surf Excel at the premium segment, we also have a Wheel at the bottom end. That helps."
Just three months into the job, the Dutchman, who said he had learnt valuable lessons, including at Procter & Gamble, where he spent 26 years, said several steps had already been taken to make the company fit for the hard times, with the aim of reigniting volume growth while protecting the group's cash flow and margin.
"We have to learn to drive the car fast even while the engine is being changed," he said.
The steps include a management pay freeze and a deep cut in travel budgets; reducing the manpower from 206,000 at the end of 2005 to around 170,000 at the end of 2008; fixing the fixed components of salary and increasing the variable pay; accelerating cost savings through appointment of a global procurement officer; and scrapping sales and margin targets set by his predecessor.
Example:
To save on costs, the company is planning simultaneous global launches in 30 or more countries. For instance, "one of its latest, Axe Dark Temptation, a chocolate deodorant, was launched in 52 markets at the same time," he said.
Polman's optimism on India has a basis. Hindustan Unilever recorded a net sales increase of 17 per cent for the December 2008 quarter. "Value growth in Indian markets is robust and we will look at our volumes' growth also becoming stronger in the second half of 2009," said Nitin Paranjpe, CEO of HUL.
