Unilever says Russia is still a land of opportunity

09-Jun-2014 - Last updated on 10-Jun-2014 at 11:21 GMT

Unilever CEO Paul Polman is confident that Russia will be an important growth market for the firm, and is ready to invest in new facilities and acquisitions in the area despite a slowing economy.

Speaking with Reuters, Polman said that he met Russian First Deputy Prime Minister Arkady Dvorkovich last week, and they discussed the Anglo-Dutch company's long-term investments.

Growing tensions between Russia and Ukraine over the situation in Crimea region, coupled with a shrinking economy, has led some food companies to review how they will invest in the market.

"We talked other investments we continue to make to be sure that we grow our business here," Polman told Reuters during a visit to Moscow.

Unilever's Russian businesses include ice cream producer Inmarko, dressings maker Baltimor, cosmetics maker Kalina, and its own factories producing Knorr soup and Lipton tea.

"Obviously (the Ukraine crisis) affects our business," said Polman. "The rouble is down, the Ukrainian currency is down. It is not helping the economic situation ... and there are rules and regulations that have to be rewritten."

"Despite that, we are growing our market share in all our home and personal care businesses... We have a good business in Russia and we don't complain about that."

Growing market

With many developed economies growing slowly, Unilever has shifted its focus to emerging markets including Russia and has been reviewing its range of global brands.

It recently sold Skippy peanut butter, Wishbone salad dressings and Ragu and Bertolli pasta sauces in the United States.
"You have to pull the weeds sometimes to let the flowers grow," Polman said in the interview.
The CEO also confirmed that Unilever is "nearly done" with a strategic review that is moving its portfolio away from mature, regional food brands to higher-growth, more profitable personal care brands with global consumer appeal.
"We sold PF Chang's and Bertolli frozen food, Wishbone, Ragu - and we buy things like Kalina or Alberto Culver which are in our strategic categories that we have globally."

Polman said the spreads business, which accounts for around 7% of Unilever's sales, was not currently up for sale.

"We are growing market share now in spreads. We know how to run it efficiently ... and we generate quite a lot of cash from our spreads business that we then can use to finance the expansion of the emerging markets," he said.

However Polman did not rule out smaller disposals in the future.

"Once you've pulled the weeds, there are some other little weeds you have to pull," he said.