Jun 19, 2013

Unilever sets out goals for Myanmar

Unilever, the Anglo-Dutch global consumer goods company, will open its first factory in Myanmar next month as part of its 20-billion-baht (US$667 million) investment plan in consumer products in the country.

The new Unilever (Myanmar) factory, on five rai of land in Yangon, will become operational in a few more weeks. Unilever first entered the country 80 years ago but was forced to withdraw due to the political situation. It returned in 2010.

It has set a goal to become a leader in Myanmar's fast-moving consumer goods market over the next 10 years.

The business will be operated by Unilever (Myanmar), which will receive full support from the Thai side. It will also be under the supervision of Bauke Rouwers, chairman of the Unilever Group of Companies in Thailand and Indochina.

Mr Rouwers said Unilever Myanmar could be the first multinational company to operate a local manufacturing facility there.

Last December, Unilever was granted a licence from the Myanmar Investment Committee to run a manufacturing base, starting with Knorr dehydrated soup mixes and condiments.

The factory, built on five rai of land in Yangon, is expected to be operational in a few weeks.

A second factory is planned for later this year, but Mr Rouwers declined to disclose the details, saying only that production from the two factories would serve the Myanmar market.

With 150 employees, the operation plans to hire 100 more over the rest of the year.

Further expansion is foreseen, and the group expects to have about 2,000 staff employed directly and indirectly in Myanmar by 2015.

“We are proud we could also repatriate some of the Myanmar workers who worked at our Min Buri factory," said Mr Rouwers.

The big expansion marks a full comeback for Unilever, which set up business in Myanmar 80 years ago, about the same time as in Thailand. But the political situation in Myanmar forced the Dutch firm to leave that country in 1965. It re-entered in 2010 by importing products from Thailand.

This year it restarted production from zero, although its brands are still available in the country. Knorr seasoning powder, Sunsilk and Clear haircare brands and Pond's facial products are the main brands and well known among local consumers.

“Subsequently, we started to build our business with a clear ambition of becoming the No.1 fast-moving consumer goods company in Myanmar within the next 10 years," he said.

The performance of Unilever in Myanmar over the past three years has been quite good, and the company is positive it can achieve its goal sooner than the 10-year target.

However, Mr Rouwers noted that Myanmar is now a very competitive market, as it has been marked as a new frontier.

"Everybody is excited about Myanmar. Everybody is either continuing business or stepping up business for consumers. It's a big, exciting country in terms of location and the number of people," he said.

With a gross domestic product about 15% that of Thailand's, Myanmar is a high-potential emerging market for Unilever, said Mr Rouwers.

About 57% of the company's global turnover comes from new markets.

"So the challenges we face in Myanmar are quite similar to those we have experienced in other emerging markets," said Mr Rouwers.

He said the economic risk is manageable: "But certain other risks are beyond our control. But all we go by is our code of business principles.

"Our code of business principles is really strong, and I think that's what we can contribute to society in Myanmar. Interestingly enough, last year when Aung San Suu Kyi visited our factory in Thailand, we spoke about our code. She was really inspired and said she would take it home. Maybe it's an inspiration for me in going forward."

Source: Bangkok Post