Unilever denies split

Unilever has denied speculation that last week’s restructure of its business units into two global divisions, one for foods, and one for home and personal care, will lead to an eventual demerger of its operations.

Unilever has denied speculation that last week’s restructure of its

business units into two global divisions, one for foods, and one for

home and personal care, will lead to an eventual demerger of its

operations.



The food and detergents conglomerate, which owns brands as diverse as

Persil, Flora and Dove soap, said the move is part of the company’s

’path to growth strategy’ as it aims to slash its original brand

portfolio from 1600 to 400 and concentrate on power brands.



However, the news has provoked a negative reaction by some analysts.



Nick Sochovsky, analyst at Lehman Brothers, says: ’Unilever is driven by

restructuring. The key problem is whether they are capable of executing

it.’ Lehman says the company’s targets for 2004 are tough and Unilever

needs to focus on its full brand portfolio.



’They’re not spending enough to stimulate the top line,’ said

Sochovsky.



’They are focusing on the top 400 and not the whole business to date.

It’s debatable how capable they are of splitting out 1200 from the 1600,

when the majority of tertiary brands are integral to the distribution

network.’



He also said the lesser brands have not been firewalled. ’That’s why

reaction from the market is debatable. There is a lot of scepticism out

here.’



While Sochovsky doubts whether Unilever will increase marketing spend

enough to support the brands, the company’s half-year results revealed

that investment in advertising had increased to 14.5% of turnover in the

half year.



The reorganisation follows news of a 9% fall in half-year pre-tax

profits to pounds 1.88bn and has fuelled speculation that the company

will demerge its core businesses.



The announcement comes at the end of a six-month review of the business

structure, to support the development of its power brands.



Unilever currently manages the divisions on a regional basis and expects

the new structure to speed up decision-making and implementation,

through tighter alignment of brand strategy with operations.



New directors will take charge of each division from January 1.



Patrick Cescau, 52, currently finance director, will take control of

food, while Keki Dadiseth, 54, who joined the board in May, becomes home

and personal care director.



Cescau has worked for Van den Bergh Foods and Lipton in America, while

Dadiseth was chairman and managing director of Hindu Stan Lever, a

Unilever subsidiary. In 1991 he became executive director and head of

home and personal products.



Current food category director Alexander Kemner will support Unilever’s

integration with Bestfoods, acquired in June for pounds 14m, until he

retires in May. Bestfood’s brands include Hellman’s mayonnaise and Knorr

soups.



Clive Butler, current homes and personal care category director, will

become corporate development director.





UNILEVER’S GLOBAL DIVISIONS



Patrick Cescau



Food products



Birds Eye Walls: Cornetto, Solero, Birds Eye Ready Meals



Van den Bergh Foods: Brooke Bond, Oxo, Peperami, Chicken Tonight, Ragu,

Delight, PG Tips, Batchelors Supernoodles





Keki Dadiseth



Home and personal care



Elida Faberge: Impulse, Dove, Vaseline, Lynx, Sure



Calvin Klein fragrances



Lever Brothers: Persil, Surf, Comfort, Jif, Domestos



Unipath: Clear Blue, Persona.



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