|Description||Company name: Unilever NV|
Date Founded: 1930
Related Companies: Quest Ireland, Quest and Unichema Business Group (disbanded in 1997 after sale of Quest International )
Unilever came into being January 1st 1930, formed by the merger of the Dutch Margarine Union and the English Lever Brother Limited. The two companies had operated wildly different financial organizations, and uniting the two structures into one lead to much discussion. It was decided by John McDowell of Lever Brothers and Paul Rijkens of the Margarine Union that the share capitals would be amalgamated so that interest would be invested equally. 'The Equalisation Agreement' provided for two holding companies with identical boards- to be known as 'Unilever Limited' and 'Unilever NV' (Netherlands). This agreement is still in force in 2015.
The first Chairman of Unilever NV was Anton Jurgens, 1930-1932.
Surviving the Depression
By 1929 shares had lost up to a third of their value, and Unilever felt the tumble. For two years there was a freefall in prices, production, trade and employment rates. The earning capacity of Unilever's new enormous capital was questioned. It was essential that the new amalgamation could build an efficient system of control. The new board (in fact two identical boards) consisted of thirty-two people who met firstly every two months, later three times a year. The Special Committee of the board was formed September 1930, becoming the key authority. Recruited directors and experts travelled endlessly, reporting on factories, politics and economic trends.
Georg Schicht became Chairman in 1932 following the retirement of Anton Jurgen. Schicht served until 1937, when he was replaced with Paul Rijkens.
By 1937 due to the mounting difficulties in trading in Europe and especially Germany, NV's contribution had fallen to one-third. This led to a re-organization of assets between the dual companies- the principles and objectives of the original Equalisation Agreement were therefore reinforced and a new agreement signed 31st December 1937.
In 1939 Dr. R.J.H. Patijn became Chairman. In 1945 he was joined by Paul Rijkens and they shared the role until 1954.
The disruption of the war
As the war progressed British operations became increasingly difficult and it was clear that Rotterdam must assume more initiative. The NV board was strengthened by the addition of seven advisory directors. Thanks to Holland Unilever survived the early months of the war with less disruption than expected, in Western Europe business was brisk. However this steady progress was shattered in May 1940 when Holland was invaded, severing the communications between the two dual companies entirely. The Germans filled half the positions on the directorate with German representatives, and the Gestapo seized all company papers. By 1944 this collapse had brought the company to a standstill. For several months investigations to prove the Dutch company was under British control continued, though the final report was inconclusive.
In 1945 NV was reunited with its brother company and back came the twin boards and the Equalization Agreement. However NV had suffered severe damage to its factories, plus damage to stocks due to the disequilibrium the war had created between supply and demand in the raw material market. This shortage made it essential for Unilever to develop new lines and products. NV focused on the development of foods, perfume and toothpaste and translantic interests expanded.
Diversification was the key to survival for the dual companies, and for the next decade the focus was on recovery lead by technological development.
Before 1950 Unilever's research and scientific methods were far from strong, but their activities were transformed by the revolution in technology brought about by the war. By the second half of the 1950's the scientific movement was a leading development for NV. It was significant that by 1957 the Chairmen's Speech by F.J Tempel at the Annual General Meetings was devoted to research-
'we mean a quest for new knowledge which can find immediate commercial application to provide the basic scientific information we hope will ultimately lead to new and improved products and processes'.
From chemists to psychologists, new experts were employed.
Methods of transport were also revolutionized by wartime advances, drawing the interests of Unilever closer together.
1958 brought the introduction of the European Common Market, enabling free trade for the Netherlands within Belgium, France, Italy and Luxembourg - a great enabler to NV's development. From 1959 onwards the annual number of Unilever acquisitions was trebled- the aim was to build up the existing share in markets they were already present in by diversifying their enterprise. Sometimes companies were acquired because Unilever wanted the skills and knowledge it represented.
New growth brought management challenges- a balance needed to be found between local independence and centralized authority. In January 1959 Rotterdam saw the establishment of the first 'Product Committee' for Continental Europe, tasked with ensuring co-ordination and limit the isolation of activity within the European arena.
Entering the 1960's the growth of Unilever departments concerned with marketing and advertising, reflected the growing sophistication of a previously unrecognized opportunity. Another new service for NV was the Information Division- the specialized public relations department. Their job was to provide the press with a correctly 'informed opinion' of that the company was doing. Unilever sought to present itself as a powerful but modest corporation, and importantly a force for progress.
In 1966 H. S. A. Hartog became Chairman, serving until 1970. He was succeeded by G.D.A. Klijnstra, 1971-1974.
Growth by Acquisition
In the 1980's the number of Unilever Acquisitions increased from around twenty to around fifty a year- a huge surge in spending. Typically these were small or medium-sized, though the number included four large acquisitions- National Starch in 1978 (for 1,993 million) and Farberge/ Elizabeth Arden (£996 million) in 1989. In addition were Brooke Bond, Naarden, Durkee, Calvin Clein and Boursin, all costing over £100 million.
In 1997 NV purchased Unipath's Dutch Distributor Brocatrade BV (the companies distributor of Clearblue), enabling them to serve the Dutch market directly.
In 1999 the focus moved from new Acquisitions: Chairman Antony Burgman outlined Unilever's strategy for growth- to focus more on the power of brands. Many would be phased out, others sold or discontinued.
The New Millennium
In the 2000 Annual Results Chairmen Niall FitzGerald and Anthony Burgman commented that their focus on growing brands was having a positive impact on margins and cash flow. Sales growth of leading brands reached 4.9% and gross margins continued to improve. This growth was reinforced by the acquisitions of Bestfoods, Slim-Fast and Ben & Jerry's - to be integrated successfully in the next year. 2001 brought good progress in Home and Personal Care, though there was a decline in Fragranced due to tough market conditions.
In 2003 NV announced its intention to delist from London, Paris and Flour German stock exchanges, as there had been low trading in NV shares in these areas.
Nail FitzGerald announced his retirement in 2004, to be succeeded by Patrick Cescau.
In 2008 Unilever announced that Group Chief Executive Patrick Cescau would retire, to be succeeded by Paul Polman.
In 2011 Paul Polman announced the details of planned changes to the top structures of the organization, aimed to make business more agile, efficient and even more consumer focused. This involved the creation of a governing Unilever Leadership Executive, covering four Categories and eight market clusters.
In 2014 Unilever announced a new innovation in the Deodorant market, with positive environmental impacts: Compressed deodorants. During the first year alone they sold 12 million cans in the women's market alone, saving 77 tons of aluminium.
In 2015 NV operates in Europe, North America, Asia and the Pacific, Latin America and the Middle East.
Last updated by Zoe Cooper April 2015
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