Emerging markets drive Unilever

18 August 2011

LONDON: Unilever, the consumer goods group, expects to derive around three-quarters of its turnover from emerging markets by 2020.

The company – covered in more detail by several Euromonitor profiles here – generates 55% of revenue from regions like Asia Pacific, Latin America and Africa, but anticipates this figure is set to rise rapidly.

"Europe and the US will be, for the next ten years, low-growth territories, I'm afraid," Paul Polman, Unilever's chief executive said, Reuters reported.

"So, soon we will have 75% of our turnover in emerging markets ... 70% to 75% by the end of decade."

Alongside positive fiscal trends, favourable demographic shifts in many fast-growth economies offer considerable potential.

"This is also where ... 2bn more people will be born in the next 40 years, and obviously where most of the world growth is going to be," Polman said.

Nations like Brazil, China, India and Turkey are among the outlets currently witnessing a substantial strengthening in demand, with significant room for further development still remaining.

"We are growing by 10% or more now consistently in the emerging markets, and that's a very healthy growth," said Polman. "So we are by any standards the emerging market company."

Unilever has increased prices ahead of its rivals in several categories, and having seen a 7.1% improvement in global underlying sales during the last quarter, predicts returns will rise by between 4% and 6% going forward.

"It's a healthy growth," said Polman. "If markets remain healthy, there is no reason why we can't maintain this top-line growth we are now showing."

Data sourced from Reuters; additional content by Warc staff