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Innovate or Stagnate



The laundry care market is besieged by higher raw material costs and retailer inflexibility on pricing. Laundry detergent suppliers offer a variety of strategies to succeed in this increasingly complex new world.



By Tom Branna, Editorial Director



Published April 2, 2012
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ILadies and gentlemen, sharpen your pencils. Recent cost-cutting announcements by some of the biggest players in the global household cleaning market means that suppliers will continue to be pressured on price even as their raw material costs continue to rise. In recent weeks, P&G and Henkel announced restructuring plans in an effort to boost profitability, and industry observers expect more household product makers to take similar cost-cutting measures in the coming weeks.

At the same time, economic troubles in Greece and the threat of a slowdown in China are being felt in nearly every corner of the world as marketers and ultimately, consumers, opt to reduce inventory.

“Last year got off to a fast start, but volume started to drop toward the end of the year due to concerns about the debt crisis,” explained Gabriel Tanbourgi, president, Care Chemicals, BASF. “Our customers started short-term ordering, the whole pipeline became cautious and that’s continued into 2012.”

Finding Ways to Win
But nearly every supplier contacted by Happi insisted that through cagey investments, keeping a watchful eye on the bottom line and rolling out a range of new products, they are well prepared to succeed in a turbulent environment.

“We call it a VUCA market: Volatile, Uncertain, Complex and Ambiguous,” explained Tom Nelson, director, customer business development, P&G Chemicals. “There is rationalization and consolidation. We have to know how to work in this market. We’re adapting and changing with the times and successfully partnering with our customers.”

The cost pressures are tremendous, agreed Dirk Buengel, senior vice president, Care Chemicals, BASF.


“We manage it very well because we offer high-volume, innovative solutions in a one-stop shop,” he explained. “We provide solutions for low-, mid- and high-tier products. Our customers offer all three price points and so do we. We understand value.”

If higher costs weren’t enough, Croda and other suppliers experienced a shortage of raw materials last year.


Gabriel Tanbourgi, BASF

Dirk Buengel, BASF
“The biggest challenges in 2011 involved securing sufficient raw materials to meet our customer’s need for our ingredients,” explained Kevin Gallagher, president, Croda Inc. “This required a lot of team work and cooperation with both our customers and our suppliers.We were able to work as an effective team to assure continuity of supply.”

Yet, Croda’s greatest opportunities came from using its insights into ingredient performance and combining them with its customers’ knowledge of consumer behavior.

“Where these intersect, we were able to help our customers exploit new niche areas, like Design for Environment (DfE)-approved formulations for a variety of home care and I&I products,” recalled Gallagher.

Few suppliers have had a more complex year than BASF, which spent much of 2011 integrating Cognis, which it acquired in 2010 for $3.8 billion. That purchase followed previous acquisitions such as Ciba (2009) and Engelhard (2006).

“The integration went very quickly. We learned a lot from past acquisitions and did a great job creating the management team,” noted Tanbourgi. “The IP integration was most important; our customers see the strength behind the acquisition. It enables us to be even more innovative within Care Chemicals.”
The integration went so smoothly, according to Buengel, that by April 2011, North American customers were unable to distinguish between legacy BASF and Cognis products.


Kevin Gallagher, Croda
“We’re not looking back; we’re looking forward at our joint opportunities,” explained Buengel. “This acquisition was about growth and synergies.”

With the Cognis acquisition complete, BASF’s Care Chemicals division brings together the No. 1 supplier in the home care and industrial & institutional (BASF) with the No. 1 supplier in personal care (Cognis).

Dow Chemical had a big acquisition of its own a few years ago, when it acquired Rohm and Haas. Now, the company counting on collaboration with customers to develop novel new products that will get the category growing again.

“In Europe, people are tightening their belts in a major way,” explained Lionel Genix, marketing director, Dow Personal Care. “But innovation is still there. Innovation and new products excite consumers and get them buying again. That’s what brand owners are doing via new product launches.”

To aid marketers around the world, Dow Chemical is adding staff to application labs in emerging markets, and boosting investment in Western Europe and North America.

New Markets
With new forms such as Tide Pods reaching the marketplace, P. Scott Bening, president and CEO of Monosol, is positively beaming, as his company supplies the vast majority of soluble films to the US laundry market.

“We’ve been at this for 23 years; it’s been a life-long goal to get North American laundry products into soluble delivery systems,” explained Bening.

Monosol has doubled the size of its business in just three years and is on track to post double-digit gains in 2012—heady stuff for a company that already controls more than 90% of the soluble film market for household care products. Now that the company is winning over the US with its polyvinyl alcohol-based, water-soluble film, Monosol is turning its attention to Europe, where it has a facility in the UK. In the future, Monosol’s films will feature greater functionality so that the film itself will contain ingredients.

“We will create even greater convenience and cleaning power,” promised Bening. “The most exciting part about what’s taking place is that we’re revolutionizing the laundry category and creating consumer acceptance. Everybody loves it.”

New Chemistry, New Company
Other suppliers are excited about new chemistries of their own. To improve anti-redeposition characteristics in liquid detergents, Dow Chemical has introduced Acusol 845 polymer. This novel anti-graying polymer is based on MAA/EA emulsion co/terpolymers that deliver exceptional whiteness maintenance and are more stable in higher surfactants doses than conventional water-soluble polyacrylates. Acusol 845 provides a pronounced enhancement in whitening in formulations containing rheology modifiers, according to Dow Chemical.


Tom Nelson, P&G Chemicals
Dow Chemical researchers are developing materials that work better in cold water that uses less water. Later this year, the company will roll out a line of green solvents. Novel new products are the way to grow in this economy, according to Genix.

“Innovation is the lifeblood of the industry,” he said. “But collaborating with our customers and sharing innovative ideas is the best way forward.”

This year, Innospec is introducing several new products. The company says its Pureact LSR, sodium lauroyl sarcosinate is another option for customers pursuing sulfate-free and mild products.

“More exciting, we are launching a new line of sulfate-free optimized blends under our Iselux brand,” explained Phil Matena, VP-sales and business development, Innospec.“Iselux SFS is an easy-to-use blend that can be compounded at room temperature to yield high-performing, cost-effective sulfate-free shampoos or skin cleansers which will definitely excite consumers.”

Also new is Iselux SLB, an optimized blend that can be used to easily produce high performing structured liquid formulations which enable formulators to dramatically enhance their creativity when formulating. This new blend takes structured liquids to a new level of simplicity while eliminating sulfates, EO, 1,4 dioxane and nitrosoamines, according to Matena.

Croda has introduced Modisurf Clarity to enable hard surface cleaners to remain cleaner, longer.Modisurf Clarity also offers an immediate benefit by preventing fogging on mirrors and other glass surfaces.

“Coltide HSi studies using scanning electron microscopy (SEM) and consumer evaluations have proven that we can help cotton fabrics, like blue jeans, last longer and look better,” explained Gallagher.“In this time of consumers’ desire to minimize the cost of ownership, what could be better than helping them keep their clothes looking better for longer?”

BASF has rolled out Glucopon 420 UP (INCI: Caprylyl myristyl glucoside). The all-duty APG surfactant is readily biodegradable, and EO-, preservative- and sulfate-free. It has excellent wetting properties, is safe for all surfaces, is compatible with a variety of surfactants and has synergies with common anionic surfactants.


David Del Guerico, Evonik Goldschmidt
Trilon M Liquid is a new chelating agent that BASF describes as a non-toxic, environmentally-friendly alternative to phosphates and other strong chelates. It effectively binds calcium and magnesium ions, but is readily biodegradable. Trilon M reduces the concentration of free metal ions in aqueous systems just like traditional amino carboxylates like EDTA and NTA.

Although the market remains volatile, there’s still room for startups. For example, P2 Science, New Haven, CT, is a new surfactant company that’s developing products for the laundry market. The executive team includes company chairman Rob Bettigole, founder and managing partner of Elm Street Ventures; CEO Neil Burns, a long-time industry veteran; chief scientific officer Patrick Foley and research director Matthew Dunn.

The venture was formed after Burns heard Foley present data on new C-glycosides, which he developed while working on his doctorate at Yale. The new molecule has excellent foaming and wetting characteristics but, most importantly, is more stable than other surfactants, such as APG, according to Burns. The new surfactant is based on glucose derived from corn, wheat and rice.
Although products are still in the development stage, Burns envisions the material serving as co-surfactants in laundry and household care applications. And while he insisted it is too soon to speculate when P2 Science’s materials could start turning up in finished formulas, initial reaction has been very positive.


Lionel Genix, Dow Personal Care
“We’re talking to larger companies that can afford to take a long-term view,” observed Burns. “It’s a brand new surfactant, so it is drawing attention.”

Successful marketers and suppliers often take the long-term view when it comes to gauging markets.
“At this point we are optimistic that our business in 2012 will out perform 2011 which was a very good year for our personal care business,” said Matena. Our customers are progressing with planned launches and our base business is sound.”

Gallagher, too, is optimistic.

“We’re very excited about the prospects for growth in 2012.We’ve got a number of projects in the works with our major customers to allow them to exploit performance improvements from new ingredient chemistry, while meeting stringent cost constraints,” he noted.

He pointed out that Croda’s home care applications lab is creating performance data on cleaning products that allow for additional claims whether they are green claims, based on DfE or performance claims based on adding functionality to existing products, or offering a laundry additive that has the proven ability to help cotton retain both color and structural integrity through multiple wash cycles.

Evonik is building an 80,000 metric ton, integrated production plant for organic specialty surfactants in Shanghai, China, which is expected to begin operation in mid-2013. The surfactants are based on renewable resources and will primarily be used in laundry care and cosmetics products.

“Our multinational customers are investing in Asia,” explained David Del Guercio, senior VP & GM, household care, consumer specialties, Evonik Goldschmidt. “They want their supply partners to grow with them.”

Not that Evonik is neglecting the fast-growing markets in Latin America. The site in Brazil will have production capacity in excess of 25,000 metric tons a year, with startup expected in early 2014.

In terms of new materials, Evonik is rolling out Rewoquat WE45, a fabric softening active ester quat that is liquid at 25°C, and is easily dispersible in water that is also at or near room temperature. That reduces or eliminates process heating costs and reduces processing turnaround time. Designed for rinse-cycle fabric softeners, Rewoquat 45 can provide softness, antistatic reduction and biodegradability. It can be used in hard, soft or deionized water and is effective in cold water, too.

P&G Chemical continues to optimize its oleochemical network in 2012. But company executives are also educating their customers that not all glycerin is created equal, explained Nelson.

The company’s Cincinnati refined glycerin plant was awarded the British Retail Consortium (BRC) Food Safety certification, a Global Food Safety Initiative benchmarked safety standard recognizing companies and facilities for superior quality assurance measures. The Cincinnati plant, which produces North America glycerin products, including Superol KPO, Superol NK, and MOON-OU, received a grade A from the BRC committee for demonstrated commitment to food safety and improvement through food safety plans and quality management systems, site stands, product and process control and personnel.

To get the word out about all the goings-on and enable its customers to locate products and services more easily, the company revamped its website, www.pgchemicals.com.

Nearly every supplier who spoke with Happi agreed that volatility, with all of its short-term ordering is here to stay. But most relish the opportunity to compete with innovative solutions for their customers.
“We are prepared for a volatile year,” agreed Tanbourgi. “Customers are still looking for innovation. Our team is focused on the customer.”

Henkel Honors Outstanding Suppliers

• At the 2012 American Cleaning Institute (ACI) Annual Meeting and Industry Convention, Jan. 30-Feb. 4 in Orlando, FL, Henkel recognized four suppliers for their excellent cooperation. The inaugural Henkel Sustainability Award was presented to BASF. The Best Supply Performance Award went to Evonik Industries. Winners of the Best Innovation Contributor Award were The Dow Chemical Company and Dow Corning.

“We are pleased to present the first Henkel Sustainability Award to our long-term business partner BASF for its excellent contributions that have advanced the development of more sustainable products from Henkel in 2011,” said Bruno Piacenza, executive vice president laundry and home care, Henkel. The successful cooperation with BASF resulted in both a new, easily dissolvable formula for automatic dishwashing tablets, and a key ingredient for high-performing hair conditioners. These developments help achieve more value for consumers using fewer resources, according to Henkel.

Reliable and flexible partners are crucial for Henkel to assure product quality. “Evonik has been recognized as best-in-class for their value contribution for the strategic dimensions of our relationship and excellent service regarding quality, quantity, and timeliness of supply,” said Bertrand Conquéret, corporate senior vice president and head of global purchasing, Henkel. “Among many companies that support Henkel reliably day in and day out, Evonik has set new standards especially regarding risk management and key account management across our three business units, in addition to their observation of environmental and safety measures.”

Strong business partners play a decisive role for Henkel in developing innovative products. “The Dow Chemical Company has made excellent contributions to the launch of two successful innovations in our hairstyling product category in 2011. Due to the development of a shine polymer for Henkel’s shine hairspray lines and a styling polymer technology for highest hold levels, we are able to meet consumers’ needs even better and to set new standards in the market,” said Thomas Förster, corporate vice president research & development cosmetics at Henkel.

Finally, Henkel presented an award for superior innovative strength to Dow Corning, a partner of its laundry and home care business sector. “Dow Corning’s outstanding contributions in 2011 have resulted in a new generation of foam control agents. These ingredients significantly improve the quality of the washing process while increasing material efficiency by up to four times,” said Thomas Müller-Kirschbaum, corporate senior vice president research & development, technology and supply chain, laundry & home care at Henkel. The innovative technology is now used in Henkel’s laundry detergents worldwide, strengthening the company’s leading position in its markets.

In other news, Henkel is purchasing certificates for sustainable palm kernel oil for its entire range of laundry and home care products. This ensures that for the quantity of palm kernel oil used in the production of the surfactants for Henkel’s detergents and cleaning products, a corresponding quantity of sustainable palm kernel oil will be produced and enter the supply chain.

As early as 2009, Henkel committed to cover its overall product portfolio by certificates and to complete this step by 2015. To underline its clear commitment to sustainable palm oil production, Henkel is now accelerating the process for laundry and home care, its largest product category containing surfactants.

“We are committed to sustainable business practices across the entire value chain. This includes the sustainable management of raw materials and the conservation of natural resources,” said Bruno Piacenza, executive vice president laundry and home care at Henkel. “To support the concept of sustainable palm oil and palm kernel oil cultivation and to underline Henkel’s leadership in sustainability, we decided to purchase palm kernel oil certificates to cover the full range of laundry and home care products as of 2012—as the first company within this industry on a global scale.”


Left: Bruno Piacenza, executive VP-laundry & home care at Henkel (right), presents the Henkel Sustainability Award 2011 to Gabriel Tanbourgi of BASF. Center: Evonik Industries was honored for Best Supply Performance 2011. Pictured (l-r) are David DelGuercio, Dietmar Träumer and Claus Rettig. Right: Bruno Piacenza presents Dow Corning with the Best Innovation Contributor Laundry and Home Care 2011 Award. Pictured (l-r) are Ruggero Sala and Brian Chermside of Dow Corning with Thomas Müller-Kirschbaum and Bruno Piacenza of Henkel.


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