Croda enjoys strong growth as firm looks to the ‘indie’ sector
Group is working closely with small firms
SPECIALITY CHEMICALS firm Croda International has reported growth across all of its regions and a strong performance in its consumer businesses.
The Snaith-based FTSE 100 firm is working closely with a number of “indie” cosmetic firms to produce best-selling shampoos, conditioners, lip-glosses and other beauty products.
Previously, Croda has made ingredients for skin, hair and cosmetic products for multinational giants such as L’Oréal, Estée Lauder and Boots, but now it is turning its attention to the indie sector.
The group said the sales momentum seen in the first half of the year continued in its third quarter to September 30.
Croda said constant currency sales rose by 3.4 per cent, with the core business up 4.5 per cent, driven by the strong performance in its consumer businesses.
Core business year-to-date growth was 4.7 per cent and sales of New and Protected Products (NPP) reached 28.4 per cent of total sales, with double-digit percentage growth in Personal Care and a robust pipeline of new opportunities and technologies.
Constant currency sales in Personal Care rose 4.9 per cent in the third quarter and by 7.8 per cent in the year to date.
The group globally launched its Moonshine range of specialeffect pigments for the fast-growing premium colour cosmetics market .
The Personal Care division was the stand-out performer in Croda’s first half results, producing “excellent” sales growth during the third quarter.
Croda’s chief executive officer Steve Foots said: “These small and medium-sized customers are growing at pace.
“They are groups of people with one idea – be it a lip-gloss or a shampoo. They’re in Manhattan, California, Korea, China and Japan. They move very quickly with a sophisticated product.”
One such customer is Eos, based in Manhattan, which makes flavoured lip-balms containing antioxidant-rich vitamin E, shea butter, and jojoba oil.
These natural lip-balms are hypo-allergenic, dermatologisttested, and paraben- and petrolatum-free.
“They charge three times the price of other lip-glosses. They come in big red or purple balls and you can buy them in Boots,” said Mr Foots.
“They are scientifically proven and are very good products. These companies outsource their research and development and we give them information on how to market their products.”
These indie companies tend to use social media and trusted bloggers to appeal to a younger generation that constantly use social media.
At the same time, Croda has kept its connections with the multinational giants.
“The multinationals are strongly positioned as well. We are seeing increased innovation and some of the bigger firms are acquiring these indie companies,” said Mr Foots.
“The big companies are innovating more, trying to become more agile to respond to the threat from small to mediumsized firms.”
The firm said demand was robust in all three business units, led by the innovation-rich Beauty Actives business.
Sales to multinational customers improved, with Croda ingredients selected for several major product launches, supporting ongoing growth with regional and local customers.
All regions saw progress, led by healthy demand in Asia and North America, and a steady recovery in Latin America.
In Life Sciences, constant currency sales rose 8.5 per cent.