Hindustan Unilever Ltd (HUL) has decided to separate its ice cream business, following a board meeting on Wednesday. The move aligns with recommendations made by a committee of independent directors formed in September to evaluate the future of the business.
The committee concluded that the ice cream segment, contributing around 3% to HUL’s turnover, is a high-growth category that requires substantial investment to reach its full potential. “The separation is in line with the committee’s recommendation after a comprehensive review,” HUL stated in a stock exchange filing.
The company highlighted that the ice cream business operates under a different model from HUL’s core operations, with specific cold chain infrastructure and distinct channels, limiting synergies with its other segments. “This restructuring will allow HUL to sharpen its focus on core categories like beauty, food, health, and well-being,” the company said.
The decision is part of a larger strategy by HUL’s parent company, Unilever, which announced earlier this year the separation of its global ice cream business. HUL will develop local capabilities to maintain the business as Unilever holds the trademarks and know-how for the ice cream division.
Ritesh Tiwari, HUL’s CFO, stated during a press conference that two options for the separation are under consideration: selling the business or demerging and listing it. “We expect to finalize the mode of separation by December,” he added, emphasizing that the primary goal is to maximize shareholder value while minimizing disruption.
This follows Unilever’s global restructuring initiatives, including the launch of a productivity program aimed at driving growth and improving efficiency. The ice cream business, known for brands like Kwality Wall’s, will now have greater flexibility to focus on its growth trajectory.
The board aims to determine the separation path by year-end.