Airspray suffers as competition increases

- Last updated on GMT

Related tags: Cent, United states dollar, Airspray

Airspray, the world's leading designer, manufacturer and marketer
of innovative dispensers for the cosmetics and personal care
sectors reported a significant slowdown in sales and profit growth
in the first half of 2004 due to increasing competition. Blaming
the unfavorable exchange rate fluctuations, the Netherlands based
company is shifting its investments to the US to reduce its sales
costs.

Airspray sales grew only four per cent to 16.9 million euros in the half year and operating profit was up a mere 0.6 per cent to 2.6 million euros. At constant exchange rates sales would grow 15 per cent, which is also exactly the growth of the number of dispensers sold by the Dutch company.

Although the amount of Airspray sales are record high, the growth is steeply decreasing every year, from 46 per cent in 2000 through 26 per cent in 2001, 19 per cent in 2002, 11 per cent in 2003, to only four per cent in the first half of 2004. The same trend can be seen in operating profit with a growth of 38 per cent in 2000 declining to 32 per cent next year, 24 per cent in 2002, 12 per cent last year, and less then one per cent in the half of present year.

"Apart from the economic situation, we are also facing increasing competition from a few companies that also offer foam pumps",​ admitted the management board in the company's annual report. "The relative low cost price is very important, since the lotion dispenser market is very competitive"​, added the report.

Haircare's share of profits also continued to decline slightly, dipping to 20 per cent from 30 per cent in 2000. The newly - in 2003 - identified sun care segment grew from nine percent last year to 13 per cent in the first half of 2004.

In an effort to reduce costs, Airspray intends to increasingly mould and assemble products for the US market in the US, thereby creating a natural hedge against currency rate changes.

Airspray has fully automated production facilities in its plants in the Netherlands and in the US.

"We expect that we will continue to increase our production activities in our Florida plant, since it brings logistical, and with the present exchange rate of the US Dollar, also financial advantages,"​ said the company.

Related topics: Business & Financial, Packaging

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