Symrise restructures fragrance division
local fragrance management teams in an effort to hone its fine
fragrance, personal care and oral care categories, writes Simon
Pitman.
The move, which will also provide increased resource for the local and regional markets in the household and laundry products sector, will mean a new regional management structure focused on providing high quality fragrance and oral care flavourings.
This new focus will be backed up by a regional management structure that will be supported by two global business unit teams that tap into the company's technologies and marketing resources on a global basis.
Symrise's fragrance division will now manage its global business through a regional management structure. This, the company says, will enable the division to focus its resources on the end markets, close to the consumer, and will allow rapid response to changes in local market conditions.
The fine fragrance and personal care business units will merge to form the beauty care business unit. This unit will aim to provide strategic direction for all global activity in marketing, creativity and business plan development for the Beauty products sector.
The beauty care business unit will be charged with transferring Symrise's fragrance knowledge base in personal care and fine fragrance to the regions, with the aim of strengthening both its local and global response to briefings.
Symrise's says that its number 1 position in the oral care flavor products category will continue to be supported by the mint business unit. "This unit will, as in the past, support all global, regional and local briefing opportunities through its worldwide network of oral care flavorists and through its technology base in research and development," a company statement said.
The move will also lead to a number of cut-backs in the company's operations, aimed at lowering operational costs in mature markets and upping investment in developing markets, particularly in Asia.
"These measures will impact several Symrise creative centers," the statement added. "The fragrance unit in Hamburg (Germany) will be closed. By moving the Hamburg-based household creative center to Holzminden, the unit will benefit from its direct proximity to research and development. In the immediate future, Symrise will invest additional resources in its existing sites in China and India to take advantage of these huge growth markets."
The expected synergies will lead to the loss of approximately 100 jobs worldwide, but the company did not state how much it expects to save from the restructuring.
The job losses come as no surprise, as the equity-fund owned company had already announced in November 2004 that it intended to shed nearly 600 positions within the company by the end of 2006. At the time the company said that the majority of the losses would occur in the domestic market.
In 2004, total corporate sales amounted to €1.138 billion, a slight fall compared to a turnover of €1.160 billion in 2003. Some 48 per cent of these sales came from the flavours division, 33 per cent from fragrances, and ten and nine percent came from the (former) divisions of cosmetic ingredients and aroma chemicals respectively. Seen in terms of global regions, EAME came in at the top with 56 per cent, followed by North America at 20 per cent, Asia Pacific at 19 per cent and South America at five per cent.
Symrise's move comes against a background of falling profitability in the global fragrance and flavours market as the market becomes increasingly competitive. Currently Symrise holds the number four position, with an approximately nine per cent global market share.
