Feb 18 (Reuters) - Hindustan Unilever will invest up to 20 billion rupees ($220.54 million) over two years to scale up manufacturing in its fast-growing premium categories, the Indian consumer goods major said on Wednesday, as rising competition squeezes margins.
The local unit of UK's Unilever said the investment aligns with its strategy of focusing on "fewer, bigger bets" and strengthening its presence in high-growth demand spaces amid margin pressure across its products.
Earlier this month, the company, home to Dove and Surf Excel brands, reported a 15% decline in quarterly profit, affected by thinner margins after cutting some product prices to counter rising competition.
HUL is feeling the impact of India's shift toward digital channels and direct-to-consumer brands, forcing it to rethink its portfolio and chase higher-margin categories, Akshay D'Souza, an independent consumer goods consultant, said.
"If you look at personal care, for example, you've seen a large flurry of D2C brands."
D'Souza added he expects HUL to continue making acquisitions to meet evolving consumer expectations.
Last year, the firm acquired premium D2C skincare brand Minimalist, and last week said it would buy the remaining 49% stake in plant-based food brand Oziva for 8.24 billion rupees.
Parent company Unilever's CEO Fernando Fernandez last week said the company's growth focus remains on doubling down on segments like beauty and personal care, particularly in key markets such as India and the U.S. The company was also prioritising premium segments and expanding its presence in e-commerce channels, he said.
($1 = 90.6870 Indian rupees)
(Reporting by Nishit Navin in Bengaluru; Editing by Leroy Leo)
By Nishit Navin
