INDIA – Hindustan Unilever Ltd (HUL) has established a committee of independent directors to evaluate the future of its ice cream division in light of Unilever’s global plans to spin off its ice cream business by 2025.
The move comes after Unilever, HUL’s parent company, announced its decision to demerge its €7.9 billion ice cream unit, citing its unique operational demands such as a distinct supply chain, seasonal variations, and capital-intensive requirements.
The independent committee at HUL is tasked with assessing the prospects of the ice cream business and will provide recommendations to ensure the best course of action for the division, taking into account the interests of all stakeholders involved.
Based on the committee’s advice, HUL’s audit committee and board will make the final decision.
The company also confirmed that all necessary disclosures will be made in compliance with the Securities and Exchange Board of India’s listing regulations and other relevant laws.
Unilever previously highlighted that the ice cream sector’s growth potential could be better realized under a different ownership structure, which is why the company is pursuing the spin-off.
In a March announcement, Unilever expressed confidence that the ice cream division, operating as a standalone entity, would thrive in an attractive category under new ownership.
In India, HUL’s ice cream brands, including Kwality Wall’s, Cornetto, and Magnum, contributed less than 3% of the company’s total revenue for the 2022-2023 financial year. HUL reported overall revenue from operations of ₹59,144 crore during that period.
Earlier this year, HUL stated that it was considering various options for its Indian ice cream business in response to Unilever’s global demerger strategy.
This review of the ice cream division reflects HUL’s effort to strategically align with its parent company’s decision while focusing on maintaining value for stakeholders and optimizing future growth potential.
“As far as the Indian ice cream business is concerned, we are evaluating the various options in light of this (Unilever’s) announcement,” HUL has said in a statement earlier this year.
Further announcements will follow once the board reaches a conclusion.
Subscribe to our food and agriculture industry email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE
