Meeting everyday needs of people everywhere - Unilever

19 Unilever Annual Report on Form 20-F 1999 Report of the Directors
Performance review by region and category – 1999
Asia and Pacific
Fl. million 1999 1999 1998 Change
at current at constant at constant
rates rates rates
Turnover 14 815 14 014 12 786 10%
Operating profit 1 415 1 333 1 005 33%
Operating profit before exceptional items 1 455 1 373 1 120 23%
Exceptional items (net) (40) (40) (115)
Operating margin 9.6% 9.5% 7.9%
Operating margin before exceptional items 9.8% 9.8% 8.8%
Our Asia and Pacific business had a very good year across
most countries in the region, benefiting from the recovery
in South East Asia.
Led by a strong showing in Home & Personal Care, we
achieved excellent growth in volume and profits. Foods,
however, performed less well and profits were marginally
below 1998. Overall margins improved by a full
percentage point and there was significantly increased
investment in marketing.
In India, we had another outstanding year in both volume
and profit growth. Key to this growth was a powerful
Home & Personal Care performance, with particularly
good results in hair, laundry, mass skin and personal wash.
We continued to meet consumer needs with innovation,
for example, rolling out a resealable toothpaste sachet
and a miniature Rexona deodorant stick for lower
income consumers.
Foods was less buoyant in India. The business was
particularly affected by disappointing tea sales which only
started to recover towards the end of the year following
the withdrawal of the excise duty on packaged tea
imposed in 1998. However, there was an enthusiastic
reception from Indian consumers to the roll-out of our
tea-based beverage Lipton Tiger.
Our operations in China achieved double digit volume
growth, largely due to the accelerating growth of the
Hazeline range of hair products and the successful
relaunch of the brand’s personal wash range. However,
the business remained in loss, reflecting our continued
investment. We streamlined the business, moving from
joint venture based operations to a three company
structure focused on the core areas of home and personal
care, foods and beverages, and ice cream.
Other activities included the launch of herbal based
Zhonghua toothpaste, entry into the large green tea
market through the purchase of Jinghua, a leading Beijing
based brand, and the acquisition of Mountain Cream ice
cream.
In the face of last year’s economic crisis in South East Asia,
the strategy of adapting our portfolio and reaching out to
lower income consumers was successful, leaving us well
placed to benefit from the economic recovery. In
Indonesia, turnover grew by a third, and in the Philippines
and Vietnam, where sales were also buoyant, we achieved
double digit volume growth.
We made further good progress in Japan, particularly in
personal care, on the back of successful launches such as
Dove bar and facial foam and the Mod’s Hair care range.
In Australasia, our laundry range was simplified and
relaunched, making products easier for consumers to use
and enabling us to reinforce our strong position. In Foods,
Flora pro.activ, our innovative blood cholesterol-level
lowering spread, sold very well. In Japan and Australia
tea profits grew.