Cognis streamlines operations with sale of botanicals business
The Germany based fine chemicals player said the sale of the business was finalized towards the end of last month, after extensive negotiations and satisfactorily fulfilling competition regulations.
The Botanicals business has been sold to Burgundy, which is based in Lyon, France, but also has two manufacturing sites in Spain that supply global markets, for an undisclosed sum.
Burgundy moves to increase global cosmetic share
As well as the cosmetics sector, it is also present in the pharmaceuticals and dietary supplement categories and in 2007 it had a turnover of €9m, a figure that is expected to have shown considerable growth in 2008.
In the cosmetics area it has built up a reputation for botanical extracts, supplying both dry and liquid ingredients to a wide variety of cosmetic and personal care players around the world.
Botanical extracts have grown enormously in popularity in recent years, tapping into consumer desire for natural-based products with high levels of efficacy and functionality.
Botanicals lead the way for active ingredients growth
Indeed, a recent market report from the Kline Group underlined how plant-based ingredients are likely to lead the way for market growth for these very reasons.
The report stated that global market growth of botanical actives stands at 8.0 percent, ahead of 5.4 percent average growth for other specialty actives, such as marine ingredients, proteins and peptides, and enzymes, said the market research company.
Although the sale of the division may raise a few eyebrows in the industry because botanicals is such a lucrative area to be involved in – Cognis has stressed that it has retained its botanical extract range Plantalin, designed for food and beverage applications, which Burgundy will distribute in the EU.
Making the most of synergies
This leaves Burgundy free to expand its growing presence in the area of cosmetic botanicals, while maintaining a working relationship with Cognis that will benefit both companies by tapping into distribution synergies.
“The acquisition of the Botanicals Extracts Business is totally consistent with our growth strategy,” said Charles Duval, general manager for Burgundy.
“Its product range fits well with our existing portfolio, and gives us a new entry point into the pharmaceutical, dietary supplements and cosmetics industries that will strengthen our offering and market position.”