Sanjiv Mehta, 61, took charge of Hindustan Unilever (HUL) a decade ago. Since then the FMCG major has grown nearly five times, but with competition getting fierce amid unprecedented levels of inflation and a slowdown in consumer demand, it faces fresh challenges. The Chairman and MD, however, is confident about the future. In an interview with Business Today’s Arnab Dutta, Mehta says HUL is being re-imagined and this would keep it future-ready. Edited excerpts:
Q: High inflation has been a major concern and has led to repeated price hikes. Amid faltering demand, what is the outlook for the next two-three quarters?
A: From the macroeconomic point of view, there are two other factors at play. One is private consumption or expenditure is still lower than the pre-pandemic levels. The second... is private capital expenditure. Private capex kicks in when you have your capacity utilised by over 75 per cent on an average. We are pleased that the government is not reducing the Budget deficit and is willing to continue with capital expenditure until private capex starts in a big way. The massive capital expenditure allocation by the government for the year should reflect in improving consumption.
There is a stress on demand and it is more acute in rural areas. We are witnessing that through off-take trends for small packs—priced between Ì€ 1 and Ì€ 10. This clearly indicates the stress, which worsened due to inflation, especially for households whose budgets are limited. Disruptions in the supply chain have a role in the ongoing inflation. I am hoping that in the second half of 2022, we shall start seeing some tapering off [of] prices and then gradually inflation coming down.
This story is from the April 17, 2022 edition of Business Today.
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This story is from the April 17, 2022 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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