Unilever seeks to extend its presence
By Xiao Liang (China Daily)
Updated: 2004-07-01 09:55

Unilever aims to bolster its presence in China as it has decided to build in Shanghai a new headquarters building to direct its operations in China.

The international manufacturer of food, home care and personal care products plans to move into the new building by mid 2006. Zeng Xiwen, external relations director of Unilever China, said the office building is an indicator of Unilever's long-term commitment to the Chinese market.

"Unilever rarely builds office facilities of its own. In most cases, we prefer to rent facilities to host our operations worldwide," Zeng explained.

Zeng declined to disclose the exact investments involved in the building project but revealed that Unilever would pour "several million US dollars" into it.

Unilever has already signed an agreement with the local Changning District government regarding the project.

According to the agreement, the planned Unilever office tower will be located in the district's Linkong Economic Zone, which is near the city's western Hongqiao Airport.

Construction on the over 20,000 square metre building site is scheduled by the end of this year.

Zeng said the proposed facility will allow Unilever to better co-ordinate its China operations

While Unilever's Shanghai headquarters, will take up the role of a supervisory centre in China involving functions like management, marketing, procurement as well as research and development (R&D), the company's production facilities will be located in China's middle and western areas, Zeng said.

The world's leading consumer products manufacturer has already set up a global research and development centre - alongside five other similar facilities worldwide - in the city's southwestern Caohejing area, hosting some 80 research staff.

Well entrenched in China following the establishment of its global procurement centre in Shanghai in 2002, the company has set its sights on a domestic purchase with a volume of US$1.6 billion in the coming five years.

Yet that is hardly enough.

"China, as we see, is likely to become a global production centre for Unilever," Zeng said.

Unilever has in May moved its manufacturing base of household and individual daily care products from Shanghai to Hefei of East China's Anhui Province.

Zeng revealed that other similar restructuring schemes in Unilever's food business in China are also under way, and a large production base maybe set up in Chonghua of South China's Guangdong Province in future relocation moves.

"We'd handle our business from a global perspective as well as a China perspective...we won't make decisions easily," said Zeng.

Zeng's comments dismiss rumors that Unilever would leave Shanghai as indicated by its removal in May.

Since it set up its first local joint venture in Shanghai in the mid 1980s, Unilever has so far invested over US$1 billion in China, and it has more than 4,000 employees in this country.

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