Unilever chief remains unfazed by strong dollar

The mention of “emerging markets” and “strong dollar” in discussions — and even when used in the same sentence — does not faze Paul Polman in the least. In fact, the CEO of the 53.27 billion euro (Dh204.3 billion) Unilever is giving them short shrift.

“Sixty per cent of our business are in the emerging markets — in fact, we would call it the growth markets,” said Polman. “There’s never a question of being overexposed to these markets.

“Whether one likes it or not, in 30 years 80 per cent of the world’s population will live outside of Europe and the US. So, anybody who believes in the longer term for any company, you would be better off having your footprint there.

“Our share in emerging markets is one of the highest among global companies and as a result we are well-placed. And I think (it is) one of the reasons we outgrow the market and the competition. It remains (the case) even though there is no doubt some of these (emerging) markets have challenges — sometimes more than you wish.

“But being in 190 countries of the world makes us globally diversified and leveraged

Polman’s views are quite at odds with market watchers who feel emerging markets are in for one tough ride in 2017, all courtesy of a dollar that should keep on firming up. If so, consumers in the emerging markets will be left with volatile currencies of their own and which would make impact on their purchasing powers.

But Polman suggests he is not about to get overawed by the dollar’s strength either.

“I don’t have that many worries — currencies go up and down and we deal with that,” the CEO added. “That’s there in the history of any company that’s been around a long, long time. We know how to deal with it.

“Clearly, this is not an economy working very well globally for too many people — We need to play an active role in making this better.

“So, when you had the recent devaluation in Egypt, we were able to provide lower cost products to make it more accessible even at times when consumers are under pressure.”

Unilever sure has been around a while — it can trace origins to the 1870s and went through many avatars to its present status as a consumer goods behemoth. Thirteen of its brands — straddling personalcare to the Lipton tea brand — rack up 1 billion euros and some annually.

Last week, it commissioned a Dh1 billion plant in Dubai Industrial Park for some of its popular personalcare labels, with Dove, Vaseline and Sunsilk among them. The company has been operating a Lipton plant in the emirate for some time now.

On the decision that led to choosing product mix at the new facility, Polman said: “Personalcare makes up about 60 per cent of our turnover in this region. Globally, we have a business that’s approaching 20 billion euros and the second biggest personalcare company in the world. We have consistently grown over the last seven, eight years at more than twice the rate of the market ... or even our competitors.

“On top of that we made some good acquisitions. We see a lot of potential globally to keep growing this business.”

And it’s not been averse to checking out possibilities in e-commerce wherever it can. It did so in China — “If you have the Alibaba, Tencents and Baidus in China, you have to be there (online),” Polman said. “Right now, if you are not actively participating you probably have a hard time growing in China.”

But the online way need not be limited to what it does in China. “In tomorrow’s market — even today’s — you have to experiment with different business models. That’s different for different parts of the world — some consumer-direct, some click-and-collect and online stores within a platform.

“We acquired the Dollar Shave Club, which has a 10 per cent share of the US market in shaving and male grooming products. And that’s a consumer direct business. where you have a subscription model and you get it delivered to your home.

“We want our products to be where the consumer wants to shop — that means we have to participate in all these channels.

source : gulfnews