COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

90 per cent more jobs if consumer goods output is doubled: HLL chief

Employment in the country would increase by 90 per cent if consumer goods output were to double says Hindustan Lever Limited Chairman K B Dadiseth.

Addressing HLL's annual general meeting in Bombay today, Dadiseth said, ''Studies that we have done based on data from the annual survey of industries show that consumer goods industries, such as foods, perfumes, cosmetics, plastic products and other consumer products, have an employment elasticity of around 0.9. This means that if output in these industries were to double, employment would increase by 90 per cent. The consumer goods sector can therefore have a high impact on job creation. Given the importance of employment in the (Bharatiya Janata Party-led coalition's) national agenda, this fact needs to be recognised.''

He said the consumer goods industry generated both direct and indirect employment. The indirect jobs are created in supplier industries, transport and logistics systems and the distributive trade. Often, when considering the employment-generating potential of the consumer goods sector, its capacity to create indirect employment does not get adequately considered, Dadiseth observed.

Citing examples from HLL, he said the company had created 200,000 indirect jobs through the entire supply chain of its businesses. These indirect jobs were over and above the company's 36,000 direct employees. Equally, HLL has ensured that employment is productive and sustainable and has therefore restructured its manufacturing base to maintain local and global competitiveness and overcome the cost disadvantages of unviable locations.

Speaking on how HLL had grown with India since 1912, Dadiseth said the company has woven its operations with national priorities in developing and using relevant technology, generating productive employment, stimulating industrialisation and dispersing its benefits, adding value to agriculture and in sustaining export performance.

India has become self-sufficient in food, emerged as the world's fifth largest industrial economy and has developed a significant base of technological skills. ''However, despite the country's considerable achievements in the past, much remains to be done. In the foreseeable future, the five areas that I have highlighted will continue to be of great importance not only to us but also to other businesses and, I believe, to the national agenda,'' he said.

Dadiseth said for R and D to be put to proper use business and research must work together in real partnership. Industry can be stimulated and its benefits dispersed by large and small business developing a symbiotic relationship. For adding value to agriculture, there is a clear need to better integrate industry and the farm sector. Exports can be sustained by leveraging the country's natural competitive advantages and by accessing markets through foreign alliances.

R and D should not only be confined to high-tech areas but also used to reduce costs, improve performance and provide new products and services so that the quality of life of all is improved and industries become globally competitive. ''We must clearly focus our research resources to well-defined national priorities. Critical in the successful application of R and D is the ability to get business and research working together in real partnership,'' he said.

At HLL, integration between business and research has helped develop processes for using non-conventional forest seed oils in soap making, saving around $ 1.2 billion in foreign exchange since the 1970s. It has given the company leadership in businesses as diverse as skin creams and hybrid seeds and is now being harnessed for exports of products like cold water soluble instant tea or organic chemicals made from indigenous raw materials.

For exports, Dadiseth said, in industry sectors where India has a global competitive advantage, building alliances with foreign partners can lead to a strong, growing and sustainable exports business. Following this strategy, HLL has become one of India's top five exporters, emerging as the country's largest exporter of fast- moving consumer goods, castor oil and, by value, of branded tea. Even after the Foreign Exchange Regulations Act obligation of 10 per cent exports was removed in 1991, HLL has continued it thrust on exports, which since 1991 has on an average accounted for 14 per cent of the company's net turnover.

On stimulating industralisation, Dadiseth said, ''As the country makes the transition to a more industrialised economy, continued emphasis needs to be given to spreading the benefits of industrialisation widely across the country, rather than creating small islands of affluence.''

UNI