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What’s good for India is good for HUL: Chairman Nitin Paranjpe at 89th AGM

Moneycontrol logo Moneycontrol 23-06-2022 Devika Singh
What’s good for India is good for HUL: Chairman Nitin Paranjpe at 89th AGM © Devika Singh What’s good for India is good for HUL: Chairman Nitin Paranjpe at 89th AGM

Nitin Paranjpe, the chairman of FMCG major Hindustan Unilever (HUL) on June 23 outlined the company’s goals going forward in India and stressed on the need for equitable and inclusive growth in India that is both productivity and employment led.

“HUL has been an integral part of India’s growth story over the years and has always believed that what is good for India is good for the company,” he said addressing the shareholders at HUL 89th Annual General Meet (AGM).

This was Paranjpe’s first AGM after taking over as the chairman of the company. As its parent Unilever undergoes major restructuring, HUL in February separated the positions of chairman of the board and the CEO and managing director of the company and appointed Nitin Paranjpe as its non-executive chairman and non-executive director, effective March 31. The company’s erstwhile chairman Sanjiv Mehta continues to serve as the CEO and MD of the company.

The India opportunity

Paranjpe’s speech titled ‘serving India today and tomorrow’ addressed the challenges of inequality of wealth, and poverty and said the India growth story needs to be built by transforming rural India, accelerating the growth of medium, small and micro enterprises (MSMEs), building strong infrastructure, creating a competitive edge in manufacturing, ensuring women’s participation in the workforce and deft management of the environment.

“One of the biggest drivers will be the transformation of rural India. Today, nearly 60 percent of the country’s population depends on agriculture, and yet, agriculture and allied sectors only contribute about 19 percent to the country’s GDP,” Paranjpe said.

According to the chairman, agriculture needs productivity-led growth, so that the sector can contribute significantly by improving output. “Hypothetically, we need to aim for 30 percent of those engaged in agriculture to produce what 60 percent or more do today.”

Paranjpe also stressed that the country needs to ensure that there are ample employment opportunities in other sectors to phase people out of agriculture.

The chairman similarly outlined the potential of MSMEs in driving further growth in India not only supplementing the country’s GDP, but by also providing for one of the highest employment to turnover ratios.

He further lauded government initiatives to create India as a manufacturing hub and strengthening the infrastructure in the country.

“Initiatives such as ‘Housing for All’, ‘Smart Cities Mission’; setting up of the National Bank for Financing Infrastructure and Development and the Rs 100 lakh crore master plan for multi-modal connectivity are all steps in the right direction,” he added.

However, he added, the country needs to address gender gap in the society to meet its full economic potential. “A McKinsey study estimates that India has the highest relative potential for additional GDP growth from achieving gender equality – as much as $700 billion. However, in the current scenario, according to the International Labour Organisation (ILO), India has one of the highest gender gaps with less than 20 percent women participation in the labour force. We have a long way to go to meet the global average of over 45 percent,” Paranjpe said addressing the shareholders.

Maintaining ecological balance and next generation policy reforms like GST and Insolvency and Bankruptcy Code were other important measures shared by Paranjpe to drive growth in the country.

HUL’s gameplan for India

Paranjpe said HUL will continue on its mission to serve India going ahead as the company recognises that it is the role of business to not just create economic value but also to generate social value, and to do so in a sustainable way.

“With more than 9 out of 10 Indian households using one or more of our brands, we realise that we have the power to impact the lives of our consumers,” he added.

According to the chairman, through several initiatives, HUL has been addressing challenges like water scarcity, livelihood opportunities, employability, health and sanitation among others.

The company will continue to serve India, however Paranjpe added, it is important to understand the impact of the pandemic on the country.

“For instance, people are now demanding products that not only deliver functional benefits but are also good for the planet and for people. Forecasters are predicting a new `green awakening’ and increased `climate literacy’ among consumers especially after the fragility of the planet was exposed during the pandemic,” he said.

Paranjpe outlined the need to tap digital as well as the offline medium as consumers shop across channels.

“Brands need to be present everywhere and communicate consistently to stay top of mind. But that’s not all. In a nation of paradoxes, critical to unlocking value is de-averaging – we will need to win in rural as well as urban, in mass as well as premium, in traditional as well as digital,” he added.

As HUL tries to leverage the India opportunity, the company is striving to build an intelligent enterprise, focusing on environmental sustainability build more resilient and equitable communities by raising living standards.

He highlighted initiatives such Shikhar, the company’s B2B app which helps retailers track and place orders and now reaches over 8 lakh outlets and its tech-driven Dapada manufacturing unit that became the first FMCG factory in India to join the World Economic Forum’s Global Lighthouse Network.

Paranjpe also reaffirmed HUL’s resolve to achieve net-zero emissions for all its products from sourcing to point of sale by 2039. “We have eliminated CO emissions from 2 thermal energy in our operations by replacing coal with greener alternatives such as biomass and biodiesel. By 2030, we will move away from fossil fuel-derived chemicals in our cleaning and laundry products, unlocking new ways of reducing our carbon footprint,” he added.

In conclusion, he said HUL will continue to serve its consumers by leveraging technology across the value chain while taking care of people and the planet.

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