Cognis Nutrition and Health has profitable first half

Related tags Cognis Nutrition Conjugated linoleic acid

The first half of 2004 has brought some light relief for Cognis'
Nutrition and Health division, which suffered from adverse currency
movements last year.

The company's Nutrition and Health sector registered sales of €148 million in the first two quarters of 2004, an increase of 5.7 per cent on the same period last year.

Cognis​ attributed this rise primarily to encouraging sales of CLA (conjugated linoleic acids) - marketed to reduce body fat - in the dietary supplements, pharmaceutical and healthcare market.

The Care Chemicals division also performed well during this period, accounting for €577 million or 37 per cent of the group's sales. This was a sales' augmentation of 3 per cent compared to 2003, and owed primarily to better sales by the skin care and fatty alcohol businesses, though this improvement was partially offset by higher raw material costs.

Overall, the speciality chemical company reported a 3 per cent increase in sales over 2003, despite the continuing effects of negative foreign currency, taking its net external sales to €1 559 million.

"Cognis achieved strong sales and adjusted EBITDA growth in the first half of 2004, supported by an improved trading environment in America and Asia,"​ said Dr. Antonio Trius, CEO of Cognis. "The results also show that our restructuring initiatives are bearing fruit."

The firm's full year results for 2003 had shown a fall in sales of 4.6 per cent in its nutrition and health business to €263 million. Nutrition had accounted for 9 per cent of the group's total sales, but a long-awaited surge in the growth of its natural vitamin E sales was undermined by adverse currency movements.

Cognis specialises in natural vitamin E but has strived to distinguish the product in the consumer's mind from synthetic vitamin E. Cognis claims that the natural version is twice as effective as the more common synthetic version, thanks to a molecule that the human body is more able to absorb.

A rush of market entrants into the natural vitamin E market five years ago held back Cognis' own market growth to little over 1 per cent a year, as slow consumer take-up of the more expensive natural alternative combined with over-supply.

However, 2003 had marked a turning point, the company said, as it saw a surge in the volume of its natural vitamin E sales of some 9 per cent, accompanied by a stabilising of prices from mid-year. This was driven by a rising awareness of the products' benefits that the company was now actively supporting, with expanded consumer education programmes in the USA and Europe.

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