Divestment and strong care chemical sales boost Cognis

By Simon Pitman

- Last updated on GMT

Related tags: Investment, United states

Strong sales for its Care Chemicals division and the divestment of the Oleochemicals and Pulcra Chemicals businesses boost Cognis, but net profits were still in the red in 2008.

Organic sales for the business as a whole were up 9.2 per cent and 5.5 percent on a like-for-like basis, to reach €3.0bn, while the net loss was trimmed back from €120m in 2007, to reach €63bn.

The company said that all its division grew sales, but that the best performing division was its largest, Care Chemicals.

This part of the business serves the personal care and home care industries and reported a 7.1 per cent growth in sales on a like-for-like basis and 9.8 per cent on an organic basis, to reach €1.68bn.

Strong results from surfactants and peformance ingredients

The company said that the results reflected a strong display from its performance and surfactant ingredients, particularly in the Asia Pacific and North American regions.

Breaking the sales down geographically, the Switzerland-based company said that European sales grew by 4.1 per cent €1.80bn, while North American sales grew by 3.1 per cent to €590m, despite the weakness of the US dollar.

The strongest growth came from the Latin American markets, which rose by 20.9 per cent in 2008 to reach €197m, while Asia Pacific rose by 9.2 per cent to €408m.

Green and natural source solutions

Likewise, it also pointed out that the division had benefited from the company's focus on the rapidly growing trend for green and natural source solutions, a strategy which it said was well received by its customers world-wide.

But the strong results from the care division did not help the operating result for 2008, which fell 2.6 per cent to €351m – which Cognis said was down to higher raw materials and energy costs, combined with unfavourable exchange rates.

Likewise, it also stressed that there had been a decline in volumes in the fourth quarter that had affected operating results, a factor that reflected the significant downturn of the global economy caused by the credit crunch.

Strengthened position in all key markets

Company CEO Antonio Trius said that despite the ‘difficult environment’ the company had managed to strengthen its position in all of its key markets.

“Consumers’ growing desire for personal well-being and heightened awareness of environmental sustainability are increasingly converging in the New Green lifestyles, which in turn is reaffirming and validating our strategy,”​ he said.

Although the company underlined the fact that visibility is poor for the year ahead because of the volatile market conditions, it did say that further cost savings of €70m and lower transport and energy costs should equip it to weather the conditions.

Related topics: Business & Financial

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