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
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
’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
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
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
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
Clive Butler, current homes and personal care category director, will
become corporate development director.
UNILEVER’S GLOBAL DIVISIONS
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
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.