Published in Nov-Dec 2017
First published in November-December 2017.
AURORA: Today, the big conversation within multinational companies is about purpose and sustainability. How is this expressed in Pakistan’s context in practical terms?
SHAZIA SYED: Sustainability is at the heart of the way we do business. It’s not a hobby, it’s not an add-on and it’s not only CSR. Sustainability is ingrained in our brands. When Lifebuoy talks about saving lives by washing hands, this provides scale and gives purpose to the brand. The Fair and Lovely Foundation, which provides vocational training, is another expression of this. Guddi Baji – our rural outreach programme – has helped women earn a livelihood, and when women earn money, they spend it on the health and well-being of their families. This has a trigger effect on their children and suddenly, they gain the respect of their communities – and everything becomes much more sustainable.
A: What has triggered this approach?
SS: To some extent, it started with the Millennials and the start-up culture. In our parents’ time, we were encouraged to join blue chip companies, especially those that had a foreign affiliation. Today, things are more Pakistan-centric and the spirit of the time is to ask “what are you doing for Pakistan?” This is not only true in Pakistan; it is a global phenomenon. It is one of the reasons why you see so many young people branching out into start-ups. Millennials look for a purpose – and purpose is the differentiator in the way we do business. Paul Polman (CEO, Unilever) has put Unilever miles ahead in this purpose-led approach. It is not a tick mark; it has become the way we do business. Earlier this year, Kraft-Heinz made a bid for Unilever and one of the factors working in our favour was our differentiator. Our shareholders felt that there was no match with Kraft-Heinz, because of our different approach. We believe in sustainability, which is about looking out for the next generation and embracing the big agenda, whether it is water, deforestation, hygiene, gender balance or diversity; these are values that go deeper than simply achieving our targets. Going forward, these values will be a big driving force in Pakistan. We are a leading FMCG and our footprint is huge; Lifebuoy has a penetration of 90% among Pakistani households. Our focus is to reach out to those households in terms of education and hygiene awareness. I was in a meeting with Roche today. They want to promote awareness about breast cancer, and at our end, we are looking for potential partners to reach out to our communities in the rural areas where our factories are located.
Our diversity policy is end-to-end. The woman who works in the women’s bathroom has her ‘pick and drop’ just like all the other women in the organisation. We cater to all the health issues of our employees. Or take our security guards; we are the first company to insist that they must have a day off. All these best practices are in place.
A: How many factories do you have and where are they located?
SS: Four factories; all are located in Punjab. So first of all, it is a question of, where do we start? It is like peeling an onion. We can’t just talk about purpose and not have a purpose within the organisation and our employees should be the first to benefit. Our diversity policy is end-to-end. The woman who works in the women’s bathroom has her ‘pick and drop’ just like all the other women in the organisation. We cater to all the health issues of our employees. Or take our security guards; we are the first company to insist that they must have a day off. All these best practices are in place.
A: How does Roche tie-in with your objectives?
SS: They have access to oncologists who are interested in working with us. They are working with Bait-ul-Mal, a government-led fund. We are in discussion with them because we need partners. The incidence of breast cancer is projected to be one in every nine women, but the important thing is that it is curable; the problem is that the diagnosis is carried out too late. So first and foremost, women must be made aware, and the question is, how do we incorporate that awareness? It is a sensitive subject and women avoid the topic. This is a big undertaking and the idea is to start small, find partners and start in one area. It is a work in progress.
A: How does this dovetail with your product portfolio?
SS: We are dealing with consumers and we need to understand their big concerns. Recently, at a Unilever Senior Leaders meeting in London, the topic was diversity. In my opinion, in Pakistan, diversity has a very different meaning; if we can manage to keep women alive, then we can have gender balance; this is the deeper challenge. In Pakistan, there are no women nephrologists, so women don’t normally have kidney-related ailments seen to. In our communities, there are many basic problems. We are telling them to wash their hands, but they have so many other concerns and we need to address them so that they see that we do understand and in this way, we can build up trust in those communities. This is not a tick-the-box exercise about distributing sachets. We want to become an integral part of their lives and make a difference.
A: Is this a departure from what you have been previously doing in Pakistan?
SS: It is a question of scaling up. In a country like Pakistan, we have to dig deeper. We are here to stay; we are investing another €100 million in our factories. We are talking to the government; we are providing employment, introducing best practices and the government is listening to us. The idea is to showcase what we have done and hopefully, the government will be motivated to do this as well and scale up and even join us. The issue with the government is that they don’t know how to do it; the government and the private sector need to work together.
A: Are you looking at a partnership with the government?
SS: My mission is that whatever we do within Unilever should influence government policies. The government needs to be aware of the issues and how can they be resolved.
Recently, Nestlé and Unilever partnered in launching a Women’s Chapter at the Overseas Investors Chamber of Commerce and Industry (OICCI). We invited all the 200 member companies – which by the way, account for 30% of the exchequer’s revenue. They are talking about diversity, but they don’t know how to implement it. Unilever and Nestlé will provide mentoring to the corporate women in these companies on what is required to achieve gender balance in the workplace, and if all those 200 companies can achieve gender balance, then the government can do it as well. First we need to get our house in order and front runner companies such as ours need to provide this mentoring. We recognise our role and we are taking it seriously. Of course, all this inspiration comes from the fact that Pakistan is transforming. According to data, the results have been better than ever before. This year, we won a Unilever Global Award because our growth for the past three years has been very healthy.
A: Where is this transformation coming from?
SS: Rural consumers have more money in their hands today. Inflation is hitting them less, crops are good, and rural suburbs are developing. The rate of urbanisation is picking up and we believe that the 30 emerging urban cities will be the next big thing. More and more women are joining the workforce. Consumerism is increasing and 200 new malls are expected to open by 2020. Five years ago, most people didn’t know what a mall was. Today, rural consumers in Punjab go to them; the footfall on weekends is estimated at approximately 20,000 people. They might not buy anything but eventually they will start to.
My mission is that whatever we do within Unilever should influence government policies. The government needs to be aware of the issues and how can they be resolved.
I come from a small village in Khyber Pakhtunkhwa. I go there quite often and I observe things. There are supermarkets there and the assortment has increased. I asked who bought all the cereals and other stuff. The reply was that local tourism has increased, and when Karachi folk go there in the summers, they buy these products. OOH has become another big trend because people are travelling. So lifestyles are transforming.
Kids in the village now buy the snacks they eat at school; before that, it was either an apple or sweet corn. You only have to look at the traffic jams on the roads, because there are so many cars. These signs tell us the economy is on the rise. GDP this year hit the four-point something bracket and next year we are looking at 4.9%.
A: How does Unilever view the China-Pakistan Economic Corridor (CPEC)?
SS: Very positively. It is a controversial topic; however, even if we achieve half of it... Infrastructure is a big need. With better road connectivity, the cost of doing business will go down. We had discontinued our distribution in some areas, now we are restarting because business activity is increasing. Chinese presence is increasing. Several Chinese schools are opening; Chinese restaurants are cropping up everywhere. Maybe soon, we will have to print our product information in Chinese. These are trends that we need to be aware of. A transformation is taking place in Pakistan and if we are not ahead of the game, we will lose out. Disruption is a big thing. The ways of doing business are changing dramatically.
E-commerce is coming in a big way; Artificial Intelligence (AI) is something that we will have to factor in.
A: What are your e-commerce plans?
SS: We are already partnering with Daraz.pk and we are looking at future partners. Things will start to change once people get used to the idea of buying their groceries online. The Alibaba model is both online and offline. We are living in a hybrid and complex world and we are training our people to prepare for this and encouraging them to come up with new and entrepreneurial business models.
A: So it is a total revamp.
SS: It’s not a revamp; it is transformation and disruption. We don’t have a choice; this is how it’s going to be. The question is how to attract today’s Millennials. They think very differently; they are not bothered about provident and pension funds. They want quality of life and purpose attracts them; it is the language they speak. They don’t like too many layers, they want speed. They want a fulfilling experience, rather than just a salary.
A: To what extent does Unilever work with other businesses to influence the government?
SS: The two main bodies are the OICCI and the Pakistan Business Council (PBC). We are meeting with the Prime Minister next week to discuss various issues. They government wants more foreign investment to come in, yet this is not being facilitated, and the ease of doing business with Pakistan needs to increase considerably. There is a lot of red tape and bureaucracy, and everything becomes an uphill task. Because we are perceived as foreign companies, we are more targeted when it comes to regulations. Nevertheless, the government is coming forward and we will have to see what happens after the elections. Basically, this was a private sector-friendly government and they were engaging in a dialogue with us.
A: Is it true that as a result of the Kraft-Heinz bid, Unilever are reassessing their business portfolio?
SS: The bid came as a wake-up call and once it was fended off, Unilever took the decision to reassess and take preventative measures to ensure this would not happen again. The world has changed; the complexity and the environment has changed. We have a tool called the ZBB (Zero-Based Budgeting) approach, which means that whenever we look at a business, we take a zero-based approach, rather than examine what went before. We look at a business as it stands now; not at the history – at how we would do it now.
A: There are also reports that Unilever are looking at divesting from their margarine and spreads business. How will this affect Blue Band?
SS: We have not received any information regarding this; the business here is valuable. They will probably start with Europe, but they will not just throw it away until and unless they get a good price. As far as Pakistan is concerned, everything is business as usual right now.
Shazia Syed was in conversation with Mariam Ali Baig.
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