Hindustan Unilever Ltd, India's top consumer goods maker, said on Friday it will set up a joint venture with Smollan Holdings of South Africa to service the Indian firm's retail customers.

The venture, Hindustan Unilever Field Services Pvt Ltd, will be operational from Jan. 1, and cover logistics, merchandise material and in-store services for retailers who buy Unilever products, including Lux soap, Sunsilk shampoo and Lipton tea.

Modern trade in India is growing and evolving very rapidly and our strategy is to win at point-of-purchase with our shoppers, Sanjiv Kakkar, executive director for sales and customer development at Hindustan Unilever, said in a statement.

Rising incomes and the expansion of modern trade in India are expected to boost demand for consumer products.

But Hindustan Unilever, a unit of Anglo-Dutch Unilever Plc, is facing growing competition from ITC Ltd, Godrej Consumer Products , Marico, Procter & Gamble and Colgate Palmolive Ltd.

Large retailers are also developing their own private labels and squeezing the margins of consumer goods makers like Unilever. At 0955 shares in Hindustan Unilever were up 0.6 percent at 195.35 rupees in a Mumbai market up 1.4 percent.

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