At a meeting on Wednesday, the board of directors of Hindustan Unilever (HUL) decided to separate the ice cream business. A committee of independent directors was established by the board in September to assess the the business’s future.
Factors considered by HUL Committee
When the Independent Committee decided to split the business, it took into account the following important factors:
- About 3% of HUL’s revenue comes from the high-growth category of ice cream, which requires large investments to reach its full potential.
- Since Unilever has declared the separation of its Ice Cream business and owns the trademarks and expertise, it will be necessary to create local capabilities in order to continue operating the business.
- Ice Cream has a different operating model including cold chain infrastructure, and a distinct channel landscape, which limits synergies with rest of HUL.
By reorganizing its portfolio, HUL will be able to concentrate deeper on its core operations and bolster its presence in popular markets like food, beauty, and health and wellness.
Kwality Wall’s ice cream manufacturer added that new division will provide the company more freedom and concentration to run its operations.
Following the Board’s review of the issue, the Company will make the required disclosures in compliance with the SEBI Listing Regulations and other applicable laws.
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