Growth slow in Cognis first half
mere 1 per cent on the same period last year, generating €1,633
million. The company's chief financial officer blamed the difficult
world economy for slowing growth, despite a higher rate of
production. Strongest growth was seen in the Nutrition and Health
unit which increased by 9 per cent on the same period last year.
Speciality chemicals business Cognis saw first half sales rise a mere 1 per cent on the same period last year, generating €1,633 million, while the EBIT of €107 million was a 5 per cent increase on the first half of 2001. Strongest growth was in the Nutrition and Health unit.
Chief financial officer Joachim Sohngen said the result was a positive development but stressed that Cognis would not be satisfied with this alone.
"The difficult world economic environment is retarding our growth, even though lower costs for raw materials and a higher rate of production capacity utilisation have exercised a positive influence on our earnings. We plan further intensification of our efforts to exploit growth potential," said Sohngen.
The company added that there is growth potential in the Asian markets for cosmetics, detergents and household cleaners and for nutrition and health the US and Europe would be the main targets.
Asia/Pacific and Europe were the stronger markets in the first half of 2002, with sales rising 3.3 and 2.5 per cent respectively. Sales fell by 3.2 per cent in North America, continuing the trend from last year, and 2.4 per cent in Latin America due to the economic situation and currency exchange rates, said the company.
The Nutrition & Health business unit achieved the highest growth of all the five business units (9 per cent), to which the demand for sterols made a particularly large contribution to sales of €149 million. Sales of €357 million were made with Functional Products - a drop of 1 per cent in comparison with the first half of 2002.
The oleochemicals business unit recorded the highest sales - €541 million. This however was 1 per cent below last year's level, primarily due to delayed orders in oilfield chemicals and pressures on prices for fatty alcohols and fatty acids, said Cognis.
Sales of Care Chemicals in the first half-year increased 1 per cent on the same period last year, reaching €286 million, with especially good sales development in Germany, Turkey and Taiwan. Devaluation of local currencies hit the Process Chemicals sector, which fell 2 per cent below the same period last year. A decline in sales in textile auxiliaries business in Europe was offset by a rising demand in the USA. Sales in Other Activities rose to €37 million, 29 per cent higher than in the same period in 2001. Here a high demand for fragrances became particularly apparent, reported the company.
Owned by an investor group consisting of Permira, GS Capital Partners, and Schroder Ventures Life Sciences, Cognis recorded sales of €3.1 billion and an operating profit of €174 million in 2001.
The company recently signed an agreement with Norwegian company Natural, which gives it worldwide marketing and manufacturing rights for two of Natural's CLA brands.
