Cognis: Moving with the times

18 April 2006

The major chemical companies are vying for a place in the lucrative Chinese marketplace and Cognis are no exception. With this objective in mind, they have significantly stepped up operations in China in recent years. According to Ramon Segura, global marketing manager, Cognis: 'No economy on earth is as dynamic as China is right now and the country already accounts for more than 10% of the global chemical market. Analysts expect that over the next few years, China will become the second biggest market for chemicals in the world, behind only the USA.' Cognis operations in China began in 1994 under the guise of Shanghai Henkel and they currently employ 381 people at sites in Shanghai and Hong Kong. The leather division in China saw a marked increase in turnover in 2004. Initally, their production of leather chemicals in China concentrated on degreasing agents and surfactants. In 2001, the first batch of Cognis core fatliquors were processed in China. Since then, more and more special fatliquors have been produced. Production capacity will be increased with the opening of a new plant in Jinshan City near Shanghai. The leather division has invested a total of €3.7million in the facility, due to open in July 2006. In addition to the degreasing agents, surfactants and some retanning agents currently produced in China, newer fatliquors in the company's range will be produced at the facility. In the past three years, Cognis have been focusing on the growing markets of Brazil and China. The company have also started to speed up their activities in Russia, driven by Cognis Türkiye, one of the strongest Cognis organisations. The company support this market via the Kalan Kimia infrastructure. The next step in the company's expansion will be India, where they are already working with a number of distributors. Although Cognis are embracing the emerging markets, they are still committed to their traditional clients such as Italy. Segura states: 'The Italian market is one of the most important in terms of leather production as well as fashion and creativity of leather articles, but it has been through a period of radical change over the last years due to the globalisation of leather business and the transfer of production to countries such as China, India and Brazil.' In response to these changes in the market, in 2005 Cognis updated the structure of their leather division in Italy. In order to provide customers with faster service and greater flexibility, Cognis Italy transferred some customers and geographic areas to the well-known distributor, Lachiter. In addition to being a regular distributor of Cognis products, Lachiter are also partners who produce some auxiliary agents under licence from Cognis. Some fatliquors, mainly those based on sulfitation technology, have been transferred to Cognis Spain, as part of a production concentration plan between Italy and Spain. The Cognis Italy facility in Fino Mornasco will continue to spearhead business in Italy, as it has done successfully for the past thirty years, guided by the business manager for Italy, Giuseppe Scarpato. In order to maintain the challenge of innovation and development of new products, Cognis Italy will be supported from Cognis' r&d lab near Barcelona. The Spanish site also produces for neighbouring countries so has been cushioned slightly from the decline of the Spanish market. Segura told Leather International that Italy is the main leather market, followed by Spain, Türkiye, Germany, and France. Italy suffers from strong competition from Brazil and China in upholstery and leather shoes. He added: 'The Spanish footwear sector is suffering as Chinese, Indian and Vietnamese footwear is on sale in Spanish shops. This then has a knock-on effect on leather producers.' Although there are still some important tanneries in Spain which focus on high quality leathers, Segura sees no prospect for change. He believes the cyclical crises suffered by the industry in the past were resolved by devaluation of the currency. This is now impossible because of the euro. The current crisis is part of globalisation which makes it more profitable to produce away from Europe due to labour costs. Europe is in decline, but will eventually reach some stability using high quality leather products. So, as an international company, Cognis look to move to growing markets, eg China, India and Brazil, in order to invest there. The company were formed from Henkel, a German detergent and cosmetics producer. Henkel's chemical division was sold in 2001 to a financial group; private equity funds Permira, GS Capital Partners, and SV Life Sciences. From 2001, this entity proceeded alone as Cognis, with the group being centred in Spain, Italy and Türkiye, where the company's major sales and r&d departments are located, in addition to Brazil. There are additional production centres in Mexico, Brazil, China and Argentina and they are present in many other leather producing countries via distributors. Although Cognis no longer have marketing and production in Germany, the HQ is still located in Monheim where Dr Yusuf Aktalay, group vice president for process chemicals, is based. Segura affirms that one of the advantages of the company's Henkel heritage is the inherited German know-how. Since January 2005, Ramon Segura has been global marketing manager for leather technology. Segura began working for the Henkel leather chemicals department in 1984. After three years, he became head of the laboratories in Spain, progressing to product manager for Henkel Iberia and, in 2003, to international product manager for the group. He is a published chemist and has presented papers at a number of IULTCS congresses. The environment has always been a priority for the company. Cognis were the first company to recommend against the use of NPEs and now use ethoxylated fatty alcohols instead. Since the ban on NPEs in early 2005, more and more customers have begun to purchase alternative products from Cognis, and many others had already been using these alternatives since 1991. The company's biodegradable products reduce the environmental impact of tannery wastewaters. Further development of environmentally friendly chemicals will form an important part of Cognis' future strategy.

Privacy Policy
We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.