Unilever maintains commitment

Unilever, one of the world's largest producers of fast-moving consumer goods, remains committed to continuous investment in Thailand despite the current economic uncertainty.

The long-term commitment is part of the company's major goal of posting consistent annual growth in Thailand of 8 per cent and sales revenues of Bt50 billion in 2012.

The company will invest Bt1.6 billion this year in capacity expansion and upgrading technology at its two main Thai factories.

Unilever manufactures food products at the Gateway Industrial Park in Chachoengsao, while its factory at the Lat Krabang Industrial Estate produces detergent, shampoo and ice cream.

"Despite the global economic woes and the difficult political situation in Thailand, I wish to emphasise, without reservation, that Unilever remains totally committed to its business operations here and is very optimistic about Thailand's long-term potential," said Loic Tardy, chairman of the Unilever Thai Group of Companies.

He said Unilever had served the everyday needs of Thai people for nearly 80 years, and that Thailand was a major manufacturing base for the group and a major market for its products.

"We are quite satisfied with our 2008 performance, which is in line with Thailand's economic growth and the overall market growth, which is at about 4 per cent, given the very turbulent global economic conditions and challenges to consumer confidence due to domestic political developments," said Tardy.

Tardy will end his term in Thailand this month and assume his new role, based in Singapore, as senior vice president for haircare products, responsible for Asia, Africa and the Middle East.

"In 2008, we achieved double-digit growth in some categories such as deodorant, personal washes, face care, impulse ice cream and soups. We also posted an exceptional entry into the health liquid segment in personal-wash products with our Vaseline brand, where we achieved leadership with a 40-per-cent market share in four months," he said.

Tardy added that Unilever enjoyed higher growth of 8 per cent in the final quarter of last year, as the market improved slightly and the company gained share in some product categories.

"We are quite confident in our good market share and strong momentum going into 2009. We have no plan to cut back on spending, or for any lay-offs," he said.

He added that the company would maintain its investment in research and development and innovation, as well as its commitment to and planned investments in corporate social-responsibility activities.

The chairman said the biggest problem for Thai consumers in 2008 had been the rapid increase in the price of oil and subsequent rapid inflation in the first half of the year. In 2009, this challenge has evaporated completely but Thailand should continue to push hard to increase its overall energy efficiency and decrease its dependence on imported oil. Low oil prices will not last, he added.

"With a sharp reduction in global demand, Thailand 's export-driven economy is bound to suffer. However, Thailand's exports are well diversified both in terms of products and markets, so we are better positioned than many other countries. At the same time, the government must replace slowing demand for exports, which is what it is planning to do with its Bt300-billion stimulus package.

"Domestic investment should concentrate on employment generation and enhancing the Kingdom's international competitiveness, especially in logistics infrastructure and human-resources development," he said.

Tardy said logistics costs in Thailand accounted for about 20 per cent of gross domestic product, which is extremely high. In other countries, logistics represent only 8 per cent of GDP on average.

"We estimate that the Thai market for fast-moving consumer goods in 2009 will be as good as 2008. We will, however, do better and expand our market share this year. We are quite confident about 2009, as we believe the outlook will remain positive," he said.