Unilever to expand production in China

Updated: 2011-05-03 09:55

By Li Woke (China Daily)

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TIANJIN - Unilever Plc will build one of its largest production bases in the Chinese municipality of Tianjin, the company announced on Friday.

Unilever to expand production in China

Unilever Plc in China. The company has business worth $2 billion in China and intends to increase that figure fivefold by 2020.  [Photo/China Daily]


The move is part of a strategy to increase the presence of the global consumer products giant in the world's second-largest economy.

The facility will be located in the Binhai New Area of Tianjin, and will have an area of 53.33 hectares and annual production capacity of 100,000 tons, the company said.

"Unilever is very committed to China and we have a very fast-growing business here," said Harish Manwani, president of the company's Asian and African divisions.

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The new production base will produce items such as washing liquid and toothpaste for the Chinese market and for export to Northeast Asian countries.

"Investment in the first phase of this site will reach $100 million, and I hope this will only be the beginning," said Manwani.

The maker of Lipton's tea and Dove soaps has business worth $2 billion in China, and the company intends to increase that figure fivefold by 2020.

Media reported earlier that the company's Chief Executive Officer, Paul Polman, is looking for higher profit margins this year.

That's in spite of rising costs and difficult trading conditions in Western Europe and North America.

Polman said Unilever should be capable of growing its underlying sales by between 4 and 6 percent each year.

Last week, the Anglo-Dutch company reported first-quarter sales rose 7 percent to 10.9 billion euros ($16.1 billion), helped by a strong performance in emerging markets such as China.

"We have delivered a good performance which demonstrates that the transformation of Unilever is progressing well; this is against a backdrop of rising commodity costs, weak consumer confidence and very competitive markets," said Polman last week in a statement.

Meanwhile, Unilever's rival Procter & Gamble Co (P&G) of the United States, whose products include Tide detergent and the Colgate range of dental products, has also announced solid growth.

P&G said that prices of commodities and raw materials will increase in the first half of the year, which will offset part of its operating margin.

Both Unilever and P&G have been asked by the Chinese government to delay raising prices, as Beijing is determined to keep soaring consumer prices under control.

Earlier this year, Premier Wen Jiabao set an inflation target of 4 percent for 2011.

However, inflation came in at 4.9 percent in January and February, before surging to 5.2 percent in March, despite the implementation of a series of measures designed to dampen rising prices.


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