HUL in talks to shift supply from China

MUMBAI: Hindustan Unilever (HUL) has initiated discussions on possible alternatives to raw materials that the company imports from China. This was stated by HUL CMD Sanjiv Mehta in response to shareholders’ queries at the company’s 87th annual general meeting that was held virtually on Tuesday.
“We have initiated discussions on how we could help the country become self-reliant. We do have imports of over Rs 400 crore from China. These are in the form of raw materials and packaging material. During Covid, we demonstrated a huge degree of resilience. Here also, we will partner with different businesses to overcome any risk that might arise due to the geopolitical crisis,” Mehta told shareholders.
Goods from China form nearly half of the company’s total imports at around Rs 900 crore in 2019-20. The company’s exports to China, said Mehta, are insignificant.In his speech titled ‘Chartering the unchartered, normalising the abnormal’, Mehta said the pandemic is a wake-up call for nations and businesses to step back and re-evaluate their current models. Mehta said the risk of recession remains real, but it must not be taken as a foregone conclusion. He said that the government should keep a close watch on the demand situation and step in unhesitatingly if it does not pick up in the next few months.
“The immediate impact of the national lockdown was severe supply chain constraints. As businesses pulled down shutters, it manifested in empty shelves and shrinking pipelines. From a demand perspective, the fear of loss of jobs, dwindling earnings and eroding investments have made people circumspect with their spends. The slowdown in the wheels of the economy could lead to a financial crisis in several parts of the world. While some will be able to raise funding or latch on to the lifeline sent by the governments, many businesses will stare at ruin,” said Mehta. He added that investors will look for robust balance sheets, resilient leadership, and hardy institutions.
Mehta said whether economies can avoid the recession or not, the path back to growth will depend on a range of drivers, such as the trajectory of the virus, the effectiveness of containment efforts, the economic steps taken by the governments and the reaction & behaviour of the firms & consumers, among others.

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