Consumer and adhesives giant Henkel hikes market targets
0 
China's continuing economic boom and growing middle class provide a bright future for domestic consumption from cosmetics to household appliances, from hand-held devices to high-speed train - and Germany-based Henkel AG wants a bigger share of the market.
"China is growing extremely fast so our customers need expertise and solutions immediately," Henkel Asia-Pacific President Jan-Dirk Auris told China Daily.
Auris took part in a meeting of the World Business Council for Sustainability Development in early November held for first time in Shanghai.
"I was very much impressed by the vision that China has when it comes to sustainable development and green growth after listening to Shanghai Mayor Han Zheng's speech during the meeting," he noted.
Among the challenges ahead are providing both sustainable development and affordable products, he said. Adding to the opportunity is China's shift to become less export driven and fueled more by domestic consumption.
"China is growing almost twice as fast as the average of the Asia-Pacific," said Auris.
Yet sales in the Asia-Pacific itself almost doubled in the past three years and now comprises about 15 percent of Henkel's global sales, according to the company's third quarter report.
Among global leaders in adhesives, Henkel had about 7 billion euros ($9.58 billion) in sales globally, with China being its second-largest market after North America.
"This is particularly amazing because if you go seven years back, China was not even in the top 10," said Auris. The adhesive sector accounts for 50 percent of Henkel's total business globally.
About half of global adhesives sales are generated in emerging Asia.
With such huge demand and potential, Henkel is now planning to build the world's largest adhesive plant in China.
"We have already moved ahead for land selection," said Auris.
Although he declined to reveal details, Auris said the investment will total tens of millions of euros.
In 2007, Henkel set up an Asia-Pacific R&D center in Shanghai, one of its four R&D centers, which also serves as its Asia-Pacific headquarters.
Before the cost of laboratory equipment, Henkel spent about 35 million euros on the center.
Beyond China
Today the building's testing, equipment and scientists are not only focused on China, but beyond.
"We even do global development here in Shanghai", said Auris.
As an industrial leader, Henkel's enormous size puts the company in a better position to offer services and competitive prices for its clients, the Asia-pacific region president said.
As well, its China management team is 99 percent Chinese. Such a high degree of localization gives the company an advantage over its international competitors, he added.
"In China, there are many successful emerging companies. We want to build close partnerships with them, understand what they are looking for and then provide our products and solutions," said Auris.
"For our cosmetic business, building a brand and capturing the momentum in the market is equally important," he said. "The taste is different, the preference is different, so it is very important for us not only to find the management to drive this market, it is key to leverage those solutions across the Asia-Pacific," added Auris.
"Henkel's global vision is crystal clear: to be a global leader in brands and technology. In China, Henkel's long-term plan is to be perceived by Chinese customers as a company that matches local talents with global resources," he added.
"We expect to provide more sustainable solutions to help our customers and we also expect more talent from China going beyond Asia. Henkel will continue to invest and grow," said Auris.
Founded in Germany 134 years ago, Henkel has an annual turnover of 14 billion euros globally. In the third quarter this year, its sales increased by 13.7 percent to 3.96 billion euros, the company said.
Its businesses include cosmetics, toiletries, detergents and adhesives.
In 1988 it established a representative office in Beijing and founded its first joint venture in 1990.
Go to Forum >>0 Comments