Unilever sees scope for more Russian deals: CEO

MOSCOW Tue Oct 2, 2012 10:30am EDT

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MOSCOW (Reuters) - Consumer goods giant Unilever (ULVR.L) (UNc.AS) sees scope for more deals on the Russian market, a year after its purchase of cosmetics maker Kalina doubled the group's non-food business in the country, its chief executive officer told Reuters.

"There is no reason why in the future there might not be other opportunities for companies like ours to get together with some of the emerging Russian companies," Paul Polman said in a telephone interview.

But the maker of brands such as Dove and Knorr expects most of its Russian growth to be organic, said Polman. Unilever is the biggest maker of ice-cream and household care products in Russia and the number two producer of tea, sauces and shampoos.

"We have a very good portfolio and that portfolio is doing very well. We are growing shares in most of the categories against very tough competitors," he said.

Unilever, the world's No.3 consumer goods group after Nestle (NESN.VX) and Procter & Gamble (PG.N), has invested over 2 billion euros in Russia over the last twenty years, part of a strategy to boost its presence in high-growth emerging markets.

Those markets' continued strength and Unilever's relatively low exposure to troubled developed economies such as Spain have helped the company avoid issuing a profit warning, as rivals P&G and Danone (DANO.PA) have this year.

The company has said it aims to generate at least 70 percent of total revenues in emerging markets by 2020. Russia is among the 10 biggest emerging markets for Unilever, which together account for some 35 pct of total sales.

"As we reported globally, our emerging markets business is growing at 12 percent. It is now already 56 percent of our business, and by the end of this decade we expect that to be 70—75 percent of our business at least," said Polman.

Unilever, which also counts Lipton, Sunsilk and Lux among its biggest brands, earlier reported a 7 percent rise in first-half underlying sales, while emerging markets saw growth of 11.4 percent.

"That was very strong growth well ahead of the market. I see no reason why we cannot continue to grow ahead of the market and build share - that is obviously what we are trying to do," said Polman.

(Writing by Maria Kiselyova; Editing by Catherine Evans)

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