Consumer goods group Unilever expects to see three-quarters of its turnover coming from emerging markets by 2020 as heavy investment in these fast-growing regions and sluggish growth elsewhere take effect.
“Europe and the U.S. will be, for the next 10 years, low growth territories, I’m afraid. So, soon we will have 75% of our turnover in emerging markets . . . 70% to 75% by the end of decade,” chief executive Paul Polman said in an interview.
At 55% now, Unilever and its brands like Knorr, Hellmann’s, Dove and Sunsilk already derive a higher proportion of sales in emerging markets than key rivals Procter & Gamble and Nestle.
The Anglo-Dutch group’s growth is driven by its big presence in Asia, Africa and Latin America, with Brazil, India, China and Turkey among its fastest growing markets.
“So we are by any standards the emerging market company. We are growing by 10% or more now consistently in the emerging markets and that’s a very healthy growth. We can continue to grow at a 4% to 6% range overall. It’s a healthy growth,” Polman told Reuters late on Tuesday in Istanbul.
Unilever raised its prices sharply in the second quarter to offset higher commodity costs, helping it beat forecasts with a 7.1% increase in quarterly underlying sales, and Polman said the group should be able to grow underlying sales at 4% to 6% annually into the future.
“Broadly as a company we think we have priced ahead of our competitors in some cases and we now need to see our competitors moving their prices before we would look at other things. That is happening right now and we feel more and less happy with our pricing,” he added
Polman also said as part of the company’s plan to divide Unilever into eight mega regions, Unilever Turkey will be responsible for the North Africa, Middle East and Russia, Ukraine and Belarus regions, increasing Turkey’s responsibility from 12 to 36 countries.
Turkey is a very important part of Unilever’s plan to boost the share of emerging markets in its turnover, Polman said.
The country is attracting international investors’ interest, with one of the highest economic growth rates globally. Gross domestic product (GDP) grew 11% in the first quarter.