Unilever upbeat over economy’s growth

PHOTO | DIANA NGILA Unilever executive vice-president Frank Braeken during the interview at the Norfolk Hotel, Nairobi.

What you need to know:

  • The firm is counting on an aggressive global hand washing campaign to drive sales for its soap business at a time when its grip on the local market has come under increasing attack
  • Unilever maintained that its strategy is not to go into electricity generation but produce it for its own use
  • Its dominance of the home care and beauty products segment of the fast moving consumer goods market has come under severe attack from home-grown rivals such as Bidco Oil Refineries, Interconsumer, and Haco Industries

Consumer goods manufacturer Unilever is upbeat that the Kenya economy will be stronger after the next General Election and support its growth plans in the East African region.

The firm is counting on an aggressive global hand washing campaign to drive sales for its soap business at a time when its grip on the local market has come under increasing attack.

“I find that in the external environment, there is a little bit more nervousness in the short term, given that it is ahead of an election but there is optimism in the long term future,” Unilever Africa executive vice-president Frank Braeken told Smart Company in an interview.

Hand washing campaign

Mr Braeken, who oversees around 50 countries including Kenya, was in Nairobi last week to preside over the launch of the Kenyan phase of the global hand washing campaign.

“The skin cleansing category or what is known as the soap category is very important to us and accounts for well over a quarter of our business. Besides the social impact of improving hygiene among school children, we hope to use this hand washing campaign to boost the sales of the Lifebuoy and Geisha brands,” Mr Braeken said but declined to give figures.

Unilever maintained that its strategy is not to go into electricity generation but produce it for its own use.

Its dominance of the home care and beauty products segment of the fast moving consumer goods market has come under severe attack from home-grown rivals such as Bidco Oil Refineries, Interconsumer, and Haco Industries.

The growing middle class on the continent has also seen players flood the market with products targeting niche segments. Its main rivals in Kenya, who include Reckitt Benckiser, have increased their activities, especially with products targeting the female population.

Procter & Gamble, another foreign firm with deep local roots, has extended its battle for control of the global consumer goods market with Unilever into Kenya.

Lower prices

In the past two years, Bidco has intensified the war for control of a market with increasing consumer choices and lower prices after it relaunched the Power Boy washing powder with plans to unveil liquid hand washing products targeting consumers who are actively involved in outdoor activities.

The toilet soap segment, which has been growing steadily, has also attracted its share of new entrants, growing steadily, fuelled by rising population.

The market is awash with medicated soap brands to battle names such as Dettol, Lifebuoy, Pure & Natural, and Protex, which have been positioned as the ultimate germ-busters.

The segment is critical to promoting soap use in frontier markets like Kenya, where overall sanitation and supply of clean water are a challenge.

Bidco launched Nuru — a multipurpose bar soap — while Unilever re-launched Lifebuoy soap in a bid to improve the brand’s positioning in the highly competitive medicated soaps segment.

Reckitt Benckiser has gone a step farther to introduce liquid “hand sanitisers” that can be used without water.

The now crowded medicated soap market is using additives like herbal extracts, glycerin, and presence of vitamin E to grow their sales.

“In the whole of Africa, we have witnessed increasing competition from new players who have just discovered the continent, but we have been here for years,” said Mr Braeken.

To retain its grip on the local market, Unilever Kenya recently acquired the beauty products business of Sara Lee Kenya — the manufacturers of Kiwi shoe polish—to gain access to brands such as Hair-Glo, Cleartone, and Miss, which are manufactured in the country.

Haco Industries’ beauty care products —Palmers Cocoa Butter and Palmers Olive Butter — are in direct competition with Unilever’s Lady Gay lotion and Fair and Lovely cream.