NEW DELHI: Unilever Plc said growth in India slowed even before the nationwide lockdown came into force. Unilever is the parent company of Hindustan Unilever Ltd. Slowdown in demand, liquidity issues have dented Hindustan Unilever's volume growth over the past few quarters.
HUL reported 5% volume growth in December quarter as well as in the previous two quarters, due to moderation in demand from rural areas. "Growth in India was impacted by both slowing market and the lockdown implemented at the end of March, which stopped production and shipping for a number of days," Unilever said.
Lockdown measures in India commenced from midMarch, followed by a strict nationwide lockdown, severely limiting the flow of goods and leading to a decline in South Asia, it said. Reacting to the news, shares of HUL fell.
At 1257 IST, shares of the company were 2.2% lower at 2,333.50 rupees on the National Stock Exchange. The lockdown in India affected Unilever's beauty and personal care, and food and refreshment segments.
"Whilst hair grew in the USA, the lock-down impacted the portfolio in China and in India....Skin care declined, as travel restrictions impacted the Carver portfolio and India was impacted by lock-down conditions...Tea declined low-single digit, impacted by India and out of home channel closures," it said. The Anglo-Dutch company made a quarterly turnover of 12.42 bln euros (1.02 trln rupees), with an underlying sales volume growth of 0.2%.
Unilever said it is withdrawing its growth and margin guidance for the full year over uncertainty associated with the coronavirus pandemic. "...the unknown severity and duration of the pandemic, as well as the containment measures that may be adopted in each country, means that we cannot reliably assess the impact across our markets and our business. We are therefore withdrawing our previous growth and margin outlook for 2020," CEO Alan Jope said.
The company said demand patterns are changing and as the crisis hits countries around the world, they are witnessing upswings in sales of hygiene and in-home food products, combined with some household stocking, and near cessation of out of home consumption which is particularly affecting the company's food service and ice cream business.