Mumbai: Hindustan Unilever Ltd (HUL), India’s largest consumer packaged goods maker by sales, is setting up a facility to produce deodorants in India, according to its annual report for fiscal 2012 that was released on Tuesday.
Products made at the facility will be shipped to markets across the world, said HUL, the maker of Axe, Denim, Dove and Sure deodorants.
The investment in India comes despite an economic slowdown in India, accompanied by high inflation and rupee depreciation, and an uncertain global economic environment. “While the near term conditions pose (a) challenge for the economy, the medium to longer term trends based on rising incomes, aspirations, low consumption levels, etc. are positive and an opportunity,” the report said.
HUL imports a large portion of deodorants as aerosols. “With the setting up of this manufacturing plant, the company will have a huge cost advantage,” said Anand Mour, an analyst at securities house Ambit Capital. Deodorants, according to Mour, make up a Rs 1,000 crore market, growing at 40% per annum, in which HUL has a 25% market share.
In February this year, Marico Ltd acquired the personal care brands of Paras Pharmaceuticals Ltd from British consumer goods firm Reckitt Benckiser Group Plc. The makers of brands such as Parachute and Saffola got into the high growth deodorants and hair gel market with Paras brands—Set Wet, Zatak and Livon.
HUL’s stock dropped 2.02% to close at Rs 451.05 per share on Tuesday on BSE, while the benchmark Sensex gained 0.14% to close at 16,906.58 points.