The company does not offer figures for 2012, but says it doesn’t expect spectacular growth of the business or of consumption, especially after an “extremely difficult” 2011.
“2011 basically meant declines for most markets where we operate (cosmetics, household care, adhesives), especially in terms of volume. It also meant an extremely difficult economic background, price increases for raw materials and implicitly for finished products, tough competition and aggressive advertising,” said Niculae Olteanu, president of Henkel Romania, who replaced Liviu Sfrija four months ago.
He said the biggest contributor to the company’s turnover in 2011 was the adhesives division. Henkel owns two plants that make adhesives and other construction materials in Pantelimon (Ilfov county) and in Campia Turzii (Cluj). The producer is building a third such plant in Roznov (Neamt county). In Roznov the company will invest EUR10 million, 30% of which will come from the European Union.
On the cosmetics market, Henkel owns hair care products, which include (Palette, Taft, Schauma), body care products (Fa), oral care products (Vademecum) and after shave products (Hattric).
The company does not have a cosmetics plant on the Romanian market.
“For the time being the necessary supply for the FMCG divisions (detergents and cosmetics) is imported,” Olteanu explained.
He said that around 40% of the company’s products are new products, no older than 3 years.
In 2011, the overall rate of new product launches on the Romanian market was six times higher than in 2010 and even faster in the case of the FMCG divisions.
“Syoss is the best example because it is a brand that was launched in Romania when the crisis hit. This brand became in just two years the most important one in the local portfolio of the cosmetics products division,” Olteanu said.
An increasingly tough market
Olteanu, who has been working for Henkel for 15 years, said all the markets where the company is present declined, with a few exceptions, adding that consumption returned to the level registered four or five years ago.
He explains that 2011 was marked by tough competition on all markets where Henkel is present, with merchants involved in aggressive advertising campaigns.
“These measures had a direct impact on profitability. However, Romania managed to be one of the most profitable countries within Henkel Central Eastern Europe.” Olteanu did not offer data on the company’s profit.
More stability and fewer taxes
Olteanu said he does not expect spectacular growth this year, especially after 2011 proved to be a very difficult year.
He added that Henkel’s markets still have great growth potential. On the Romanian market, consumption per capita is lower than on other markets in the region.
“For 2012 we want fiscal, monetary and exchange rate stability and fewer taxes.” He adds that the beginning of the year was not particularly good because of the cold winter.
“We don’t expect consumer optimism to return in 2012. But we could see a slight rebound of consumption in the second half of the year, considering 2012 is an election year,” Olteanu highlighted. (EUR1=RON 4.3754)
(English version by Daniela Stoican)