HUL adds 30% more capacity to supply chain to meet challenges of possible third COVID wave

HUL has added 30% more capacity in its supply chain, making it more flexible and agile to meet the challenges in case of a third COVID-19 wave, says Sanjiv Mehta, HUL Chairman and Managing Director. He expressed optimism that the rural markets will continue to be strong despite the second wave of infections hitting the hinterlands.

Addressing the company’s 88^th annual general meeting, Mehta said they are keeping a close eye on the situation and going for calibrated price hikes so as to avoid impacting consumers in a big way. “Now we have made the supply much more agile, we have taken a number of initiatives to improve efficiency. We have added much more flexibility in our supply chain by adding 30% more capacity, and we aim to preserve resilience through alternate sourcing.”

Mehta said HUL will continue to invest in technological capabilities. “We have invested in creating a very safe environment for our workforce through tiered protocols. HUL’s supply chain is undergoing a massive transformation across the verticals and the company is digitizing upstream sourcing network which allows optimization of cost,” he explained. “We are bringing in artificial intelligence and machine learning that is being leveraged for better forecasting and planning. And we are also redesigning a manufacturing and distribution network to bring in more agility and flexibility.”

The company has also significantly strengthened medical infrastructure and is accelerating the vaccination programme for the people. In regards to rural demand, Mehta said he expects it to be resilient, but will take a few more weeks for a proper assessment. “The government has increased outlay on MGNREGA, there is a rise in wages and also the MSP of certain key crops has gone up now. So we are confident, we expect the rural market to remain resilient.”

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He added that there has been an unprecedented increase in prices of tea, palm oil and crude oil based derivatives. The company would go for a judicious hike to safeguard the consumers’ interest and protect the business. “We take the prices of our finished goods, increase it in a very calibrated and judicious manner. This is to ensure that we do not pass on all the cost to the consumer with one go and which will end up having an impact on the volume,” Mehta said.

The company continues to have a very close eye on inflation and the endeavor is always to maintain the right price-value equation from the consumer perspective.