Cognis reports better performance in 2004

- Last updated on GMT

Related tags: Cent, Nutrition, Sterol, Cognis

Stronger demand for chemicals lifted sales across all business
units at Cognis, the Germany company said this week, with one of
the best performances from its health ingredients division
confirming the group's focus on wellness, writes Dominique
Patton.

One of the leading suppliers of plant sterols and natural vitamin E, sales by the Cognis​ health and nutrition segment grew 8.9 per cent to €287 million over the year, with organic sales growth of 11 per cent.

The unit benefited from strong sales of phytosterols, Tonalin CLA and carotenoids, the company said.

However despite higher volumes, sales of vitamin E declined due to the weak US dollar.

"Within N&H the focused approach to offering science-based solutions for major health concerns such as high cholesterol and body composition…is producing excellent results,"​ Paul Allen, group vice president of Cognis and responsible for Nutrition & Health, told NutraIngredients.com.

"The 2004 performance also benefited from a streamlining and refocusing of resources related to lower growth activities as part of the company's restructuring programme,"​ added Allen.

This led to significant cost savings, which benefited the unit's Illertissen location in particular, he said.

Lower costs helped the health ingredients business increase operating profit for the year by 51 per cent to €42 million.

Although Health & Nutrition is the group's smallest unit, generating less than 10 per cent of total turnover, it has the highest return on sales of all five business units at 14.7 per cent, compared to 6.3 per cent for the group's largest business, Care Chemicals.

It also had the highest spend on R&D during 2004, at 3 per cent of sales (€9 million), compared with just 1.8 per cent of sales in Care Chemicals.

Overall the company posted sales of €3,073 million, up 4.2 per cent over the prior year, with the major contribution coming from an 11 per cent sales growth at Functional Products. This unit makes polymers and coatings and was boosted by a strong US housing and construction market.

Care Chemicals, a major supplier to the cosmetics industry, saw a 5 per cent increase in sales.

Antonio Trius, CEO of Cognis, noted that the turnaround came "despite the continuing weakness of the US dollar and increasing raw material, energy and transport prices".

"This is a result of a volume pick-up in our markets but also confirms the validity of our strategy of focusing on the wellness and sustainability trends."

Trius said he is expecting moderate sales for the coming year, with increased market penetration of new products to drive sales. Overall quantities are expected to remain comparable to 2004, while last year's restructuring will reduce costs further.

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