June 24 (Bloomberg) -- Unilever, the world’s second-largest consumer-goods company, appointed the head of its Asia, Africa and central and eastern Europe unit as chief operating officer to spur growth in emerging markets.
Harish Manwani will assume the new position on Sept. 1, the London- and Rotterdam-based company said yesterday. Manwani said this month he planned to increase the Lipton Tea maker’s business in China to as much as five times the current level.
The appointment is part of a broader management reorganization at Unilever, with a focus on product categories rather than geographic regions. The new structure will speed up the process of introducing new products to different markets, Chief Executive Officer Paul Polman said in the statement.
“We fail to see the direct relationship with the innovation success rate or rollout, as Unilever has already been partially organized this way,” said Richard Withagen, an analyst at SNS Securities in Amsterdam, in a note today. He said that he sees no “long-term disadvantages” from the decision.
Unilever rose as much as 34 cents, or 1.5 percent, to 22.54 euros in Amsterdam trading, and was at 22.5 euros as of 10 a.m.
2 Billion Customers
Unilever, which has 2 billion customers globally, has created four new operating categories, and named executives to oversee each unit. Dave Lewis will be president of the personal care unit, Kevin Havelock will run the refreshment category, Antoine de Saint Affrique will oversee food and Randy Quinn and Sean Gogarty will run the home care unit, reporting to Polman. The new structure will be put in place in the third quarter and become operational before the end of the year, the company said.
Michael B. Polk, the previous head of Unilever’s foods, home and personal-care business, resigned to become CEO of Atlanta-based Newell Rubbermaid Inc. He replaced Mark D. Ketchum, who announced his retirement in January.
Unilever reported first-quarter sales in April that missed analysts’ estimates and trailed rivals Nestle SA, the world’s largest food company, and Danone, the biggest yogurt maker. Polman, who has headed the company since 2009, has pledged to double Unilever’s revenue after a decade of sluggish growth.
Asia and Africa contributed 40 percent of Unilever’s 44 billion euros ($63 billion) in sales last year as the maker of Knorr seasonings, Dove soap and Surf detergent expands in developing economies to offset stagnating sales in Europe and the U.S. More than 55 percent of Unilever’s business now comes from emerging markets, according to Manwani.
The Unilever businesses that Manwani runs have been expanding at about 18 percent to 19 percent annually, with emerging economies in Asia being “a very important part” of the growth, he said in an interview this month. China, the world’s most populous nation, may show economic growth of 9.5 percent this year, almost four times faster than the pace in the U.S., according to estimates compiled by Bloomberg.
Manwani is also chairman of India unit Hindustan Unilever Ltd., the country’s biggest listed maker of consumer products, according to data compiled by Bloomberg. He joined the Indian unit in 1976 after studying management at Mumbai University, and became president of Unilever’s Asian and African business in 2005, according to the company’s annual report.
The maker of Hellman’s mayonnaise and Magnum ice cream has reduced its promotional intensity and started raising prices amid higher costs for commodities such as crude oil and palm oil. Unilever last month said it accepted a 2 million-yuan ($309,000) fine imposed by Chinese authorities for informing media about plans to raise prices.
Higher expenses will cause profitability to drop in the first half, the company said in April, adding that it expects an improvement in the second half. Commodity-cost volatility is “unprecedented” this year, Unilever Chief Financial Officer Jean-Marc Huet said April 28.