Unilever to increase exports to US market

Unilever Philippines will increase by 25% this year its exports to the United States of deodorant sticks, among them the brands Dove, Suave and Degree. With the increase in supply to the US market, Unilever Philippines Chairman and chief executive Howard D. Belton told BusinessWorld that the local manufacturing facility will have to beef up its investments. "We are the only country in Southeast Asia which exports [deodorants] to the US. We have increased investments in the last three years to cope with US exports. When it comes to deodorant, the US market is a sticks market," he added. However, he declined to disclose the amount of investments for the upgrade of its equipment. Unilever Philippines has been exporting deodorants to North America since 2004. In a company profile, Unilever said this outsourcing arrangement "has led to nearly US$2 million in savings for Home and Personal Care North America." That same year, Unilever Philippines marked the 100 millionth stick produced by the company "with over P400 million sales and seeing 30% growth driven by exports to the United States." Prior to the US exports, Unilever Philippines has been exporting to Central Eastern Europe and Asia since 2002. This outsourcing model "now serves as the model for global sourcing and best practice for rapid global rollout within Unilever," the company statement added. Unilever Philippines has long been exporting to the US owing to the big Filipino community there. It is exporting food products such as Knorr sinigang (tamarind soup base) mix and tropical flavors of Selecta ice cream. Unilever RFM Ice Cream, which owns the Selecta brand, is a joint venture with the Concepcion family’s RFM Corp. "It has been a good market for exports there," said Mr. Belton. Mr. Belton said among the advantages of Unilever Philippines in producing the deodorant sticks are the low cost of production and flexibility. "Flexibility is important. We try very hard to say ’yes we can do it’ and respond quickly when customers come with new demand if they want to change the product. Our people work very hard -- from customer service to logistics. Filipinos are very much better compared to other Asian countries [in terms of] fluency in English and building good relationships. It is a mixture of technical skill and flexibility of customer service," he added. The local consumer market, however, does not hold much promise for the multinational company. As low consumer spending has taken its toll on every business in the country, Unilever Philippines will be growing single-digit in market growth this year compared to the double-digit growth it has tried to maintain every year. Escalating world oil prices likewise has dampened consumer sentiment. "For last year, market growth has not been as good as the previous year’s. Our business depends on how much people have to spend. This year, we can see people’s pockets being squeezed [out]. You have to find ways to make do with less. We always try and maintain double-digit [growth] every year. We managed to achieve that last year. This year, it is our objective. [But] we are behind as we are growing single-digit this year," he said. The company is particularly strong in home and personal care which Mr. Belton described as the "two biggest markets in hot competition." "Filipinos are very proud of their hair and look after it well. The hair care market is much bigger and very well developed. Creamsilk and Sunsilk will have a good year this year due to the relaunch in the beginning of the year. We are happy to see them growing. Surf [detergent] remains successful. We see to it consumers get a good deal," he added. Believing that each market has its own characteristics, he said skin care is a small market in the Philippines but has potentials of growth over the years. "In Japan, the skin care market is just amazing. They spend 20 times. We are trying Vaseline, Dove and Pond’s to develop the skin care market here. In Unilever, we developed the facial wash market. We have a big success in the last 18 months in the anti-aging products called Pond’s Early Defense product. For such a young population, anti-aging has a huge catch," he added. Unilever Philippines will be expanding the Pond’s range and bring in some more expensive products sold in Japan and Taiwan which he did not specify. As the company has launched three-in-one Selecta Ice cream product which was a big hit when it was introduced last summer, Mr. Belton said this is cheaper than the standard ice cream. - Ruby Anne M. Rubio/BusinessWorld