Chartering the Unchartered, Normalising the Abnormal
HUL Chairman and Managing Director Sanjiv Mehta’s speech at the 87th Annual General Meeting
June 30, 2020, Mumbai: Mr Sanjiv Mehta, Chairman and Managing Director, Hindustan Unilever Limited (HUL), while addressing shareholders at the Company’s 87th Annual General Meeting that was held virtually today, said that ‘the world must come together to protect lives and health of people, manage immediate term implications of COVID-19 on economies and livelihoods, and search for lasting solutions.’
In his speech titled ‘Chartering the Unchartered, Normalising the Abnormal,’ Mr Mehta, called the pandemic an improbable but in many ways predictable event that demonstrated how fragile the world has become. “This is the wake-up call for nations and businesses to step back and re-evaluate their current models,” he added.
Citing the Government’s containment strategy of a Lockdown as ‘essential’, Mr Mehta illustrated the challenges that still exist in the health infrastructure. He opined that if significant benefits are made available to the healthcare sector, India has the potential to become ‘an ‘affordable and quality’ healthcare capital of the world’.
He moved on to talk about the humble soap and how it not only removes the virus from the skin but also essentially deactivates the virus. At less than 10 paise per wash, Mr Mehta called the bar soap, ‘humankind’s best hope’ till a vaccine/cure for the virus is found.
Highlighting the importance of protecting health and lives, Mr Mehta talked about the various safety guidelines implemented across the HUL value chain. “We have also extended a COVID-19 medical insurance to thousands of people who work for our distributors in the frontline,” he added.
Economy and Business
According to Mr Mehta, the risk of recession remains real, but it must not be taken as a foregone conclusion. He said that the Government’s efforts in providing relief to the vulnerable and to MSMEs, structural reforms in the agricultural sector, privatisation of PSEs and increased FDI limits in defence will have a trickle down effect on demand, and added, “the government should keep a close watch on the demand situation and step in unhesitatingly if it does not pick up in the next few months.”
Speed and Agility
In his speech, Mr Mehta talked about how HUL demonstrated speed and agility to overcome operational challenges during the lockdown. “We shortened the entire planning to execution cycle to a daily horizon and ensured a dynamic response to an everyday changing environment. Over hundred instances of critical material supply disruptions were handled with speed by onboarding dozens of new suppliers,” Mr Mehta said.
He mentioned the several steps taken by the HUL business to respond to the challenges posed by the pandemic and changing consumer needs. “As an illustration the production of sanitizers was ramped up by a factor of 100X,” he added. In the last couple of months, HUL has launched several formats of Lifebuoy sanitizer, a Domex sodium hypochlorite-based spray, Lifebuoy laundry sanitizer and Surf excel laundry powders with enhanced germ kill. The Company has also boosted the Zinc content in Horlicks, the leading Health Foods Drink brand, based on studies that demonstrated positive immunity outcomes with higher Zinc levels.
Technology as a Saviour
Mr Mehta mentioned how the importance of the capabilities built under the Company’s digital transformation programme ‘Reimagine HUL’ became apparent during the national lockdown. “In some areas our salesman could not physically reach the stores. The app-based ordering capability was quickly rolled out to these stores to restore our ability to capture orders and meet consumer demands. Similarly, extensive data about the stores and market helped us to re-design the service model and create new optimised routes for delivery. The power of automated warehouse kicked in and enabled us to deliver to stores even in situations where the distributor was not operational.”
Talking about the need for a new multi-stakeholder model of capitalism, Mr Mehta went on to illustrate how HUL has demonstrated that when the focus is on consumers, customers & suppliers, employees, planet, and the society then shareholder wealth does get created. “In the last five years alone, we have created more shareholder wealth than the market capitalisation of any but three companies in our country,” he added.
HUL – A Responsible Capitalist
When COVID-19 hit India, HUL immediately earmarked Rs. 100 crores to help the country fight this crisis. The Company has been helping to augment the capacity of health infrastructure by donating several ventilators and about 75,000 RT-PCR test kits to hospitals. In fact, the first 150,000 packs of Horlicks with higher Zinc was donated to hospitals across the nation that treat COVID-19 positive patients. HUL had reduced the prices of their soaps and disinfectants to make it more affordable and accessible to people and had reached out to thousands of people in the marginal sections of society with food and hygiene kits.
Mr Mehta summed up his speech by saying that to transition to a better future, we need to address all the convergent crises and it can only be done with international cooperation, based on the real needs of people for health, economic security, and respect for their human rights. “The Excalibur is now in our hands, it is on us how we establish the righteous that creates a harmonious and ecologically balanced world,” he concluded.
To access the speech in full, please click on this link (PDF | 405KB).