REPACKAGED GOODS.

Charlie Strauss puts innovation at the center of Unilever's Latin American operations.

WHEN CHARLIE STRAUSS TOOK OVBR AS HEAD OF Unilever's Latin America business group in March 1996, he stepped right into a pressure cooker. The US$48 billion (1998 sales) Anglo-Dutch consumer products firm, whose brands include Lipton, Vaseline and Dove, was reorganizing global operations into 12 business categories with a heavy-duty emphasis on emerging markets. Strauss's mission: Integrate Latin America along product lines instead of just national boundaries and, of course, grow, grow, grow.

Three years later, the region accounts for more than a tenth of the company's global sales and profits. Strauss has kept margins at around 10% straight through more than $1 billion in acquisitions and tough economic conditions in major markets like Brazil and Argentina. The 56-year-old executive's handiwork is not going unnoticed at the head office, which promoted him in September to president of Unilever's massive home and personal care group for North America.

"To get growth going, we needed to start working together as a region," says Strauss. For starters, he consolidated the Caribbean (previously run from London) and Mexico (formerly a part of the North America business group) into Latin America. Next, he established regional innovation centers for each one of the 12 business lines in different countries. For example, the center for tea products was located in Chile, skin care in Mexico and laundry detergents in Brazil. "The idea is to bring a stream of products and concepts to the market across the region," Strauss says.

"Think Latin America." Obviously one of the major obstacles to creating pan-regional centers in any given country is that local issues in that market tend to dominate executives' attention. Strauss knew that just ordering people to "think Latin America" would not work, so he made the centers answer to all of the country managers, who staffed them with people from their offices and paid for their operation out of their budgets.

With Brazilians, Mexicans, Argentines and others sharing product category expertise in different parts of the region, the ideas started to flow In Brazil, where Unilever absolutely dominates the detergent business with some 80% of the market, the one segment with a gaping hole in participation were poor people. That is until the Ala brand hit the market in the fall of 1996 in northeastern Brazil, the poorest region of the country. The specially formulated product at an affordable price quickly took 15% market share from other low-cost options.

Unilever's hair care innovation center in Buenos Aires found its own unattended segment in mulattoes, people of mixed European and African descent. "Our typical shampoos and conditioners are developed for people of European descent," Strauss says. Within a year after launch, the Seda brand was growing--through very tough times in Brazil--t 20% per annum in a $100 million-plus market for hair care products.

Bulk savings. Product development is not the only area where Strauss pushes his ple. After buying companies and brands across the region, Unilever, like many consumer product multinationals, is trying to generate regional economies of scale without losing the power of strong local brands like tomato paste Malloa in Chile and Cica in Brazil. "We have kept the brands the same, but our sourcing is done regionally," Strauss says. "Some of the tomato sauces have different flavors and seasoning but we centralize the supply of raw materials:'

With growth in Latin America, particularly in Brazil and Argentina, slowing considerably this year, Unilever is now feeling the pinch to find savings from bulk operations more than ever.

And Jorge P. Montoya, head of Latin America for Procter & Gamble, has complained formally that Unilever is too innovative for its own good. The U.S. company went to Argentine regulators about ads showing toilet seats for a local manufacturer named Ariel del Plata in Argentina, claiming the spots were actually a subterfuge by Unilever to undermine P&G's launch of its detergent with the same name, Ariel. (A charge Unilever executives simply dismiss as "slanderous."

The high elbows may be just a taste of things to come for Strauss, who in his new assignment as head of home and personal care group for North America will now face P&G on its home turf.