Financial Daily from THE HINDU group of publications
Wednesday, May 21, 2003
Financial Daily from THE HINDU group of publications Wednesday, May 21, 2003 |
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Corporate
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Outlook High wages, social costs cause for concern: HLL Our Bureau
MUMBAI, May 20 FMCG major Hindustan Lever Ltd (HLL) has, in its annual report of 2002, said that high wages and social costs continues to be serious cause for concern, adversely impacting the international competitiveness of Indian tea plantations. It pointed to the fact that the performance of tea plantations in 2002 has to be viewed in the context of an `extremely challenging' year for the Indian tea industry. Global abundance of supplies and a slowdown in Indian exports led to continuance of bearish commodity markets, HLL said. The company said the production of its crop was adversely affected in North Indian plantations due to unfavourable weather conditions. The southern ones were impacted by industry-wide wage dispute leading to labour unrest and a lock-out in one of the divisions. The company said commodity price pressures at the mass market segment and rationalisation of `unviable and non-strategic' brands led to an overall sales decline in the tea market. ``The mass market segment is getting commoditised with the emergence of large number of regional players,'' HLL said in its annual report of 2002. The company continued the implementation of Sustainable Agriculture Project with the Chennai-based M.S. Swaminathan Research Foundation to use renewable resources. Beverages exports turnover was also adversely affected by the loss of packet tea exports business to Russia because of the `discriminatory import duty' introduced by the Russian Government on packet tea vis-a-vis loose tea. ``We have also lost some businesses in the Gulf countries due to the political and economic uncertainties,'' HLL said. Contrary to reports that HLL's vanaspati brand, Dalda, was up for sale, the company said it continued its premier position across regions and commanded premium price, even as total market for vanaspati in consumer packet shrank by more than 20 per cent.
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