Cognis takes heart from strong 2006

By Jess Halliday

- Last updated on GMT

Related tags Nutrition Cognis

Cognis has reported strong sales and operating profits for full
year 2006 - results to which its wellness and sustainability focus
made significant contribution.

The German specialty chemicals group posted a 6.2 per cent increase in sales compared to 2005, to €3.37bn, and the operating result increased 10.7 per cent to €389m. Although the group, which is owned by private equity funds, does not give detailed break-out figures for each of its business units, in nutrition and health it reported a 4.2 per cent rise in sales to €316m. "The 2006 results have confirmed that our strategy is the right one,"​ said CEO Dr Antonius Trius. "Our focus on providing highly-innovative specialties relating to the wellness and sustainability trends has enabled us to develop our business and achieve profitable growth. "The acquisitions and investments we made in the course of 2006 also helped strengthen our market position."​ In nutrition and health, the acquisition of Norwegian omega-3 fish oil producer Napro Pharma allowed the company to expand its ingredient range for functional foods and supplements. It launched its OmeVital fish oil ingredient in Europe at the HIE trade show last November. High-margin sterols and CLA made a positive contribution; in 2005 Cognis put its money where its mouth is and commissioned a €20m esterification plant at its Illertissen site in Germany. This represents the greatest single investment the company has made in its seven-year history. But the same could not be said for all aspects of the unit: food technology sales and vitamin E products fell slightly in 2006. In the last couple of years the Vitamin E market as a whole has been affected by discussions in the media and scientific community about the risks and benefits of the ingredient - and that has had a knock-on effect for the company. ​ Trius said that the improved operating results were achieved in spite of a fall in the price of fatty-alcohol-based products and increasing energy and raw material costs. A number of other suppliers in the ingredients sector have noted energy and raw material amongst detracting factors for their 2006 results, so it is to Cognis' strength that any impact was offset. Last year Cognis reviewed its strategic options "in light of an attractive market environment".​ A spokesperson told at the time that it is normal practice for private equity owned firms to check their strategic process every four to six years. But rumours in the press that it was in advanced states of negotiations with three potential buyers proved unfounded when the group at last concluded not the put itself up for sale for the time-being.

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