Beiersdorf stresses big brands and new markets for future growth

The maker of leading skin care brand Nivea as well as a range of personal care and other consumer goods said in a recently published financial profile that its medium- to long-term goals will focus on increasing its market share in developing countries from 26 per to around 35 - 40 per cent.

Although the company still derives 26 per cent of its €4.7 billion global sales from the domestic market, the company has pointed out to the slow retail economy and market saturation as good reasons to concentrate on other markets.

In Western Europe, a similar picture leaves the company to believe that, although this market represents 48 per cent of all its sales, growth opportunities will also be limited, however the company says it is still expecting to achieve sales growth at 2 per cent above the current general market growth..

The company says that for sizeable regions, such as China, it will be introducing dedicated solutions for specific product categories. However, other categories will have just one global strategy, largely dedicated to the most significant brands.

Looking at the supply chain, a major re-organisation is already underway which is expected to cost the company somewhere in the region of €220 million. However, the company also adds that once the investments are implemented annual savings should amount to €100 million.

Acquisitions will also form a part of future strategies, particularly in the skin and beauty care region. Given the stagnant European market, it is expected that the acquisition trail will be led in the developing countries, which will again see China, India, Brazil and Russia as the key focus for the businesses that provide strong synergies.

News of Beiersdorf's future strategies comes on the back of full year financial results released last week that revealed the company had a strong performance in 2005, with sales growing 5.1 per cent to reach €4.77 billion and profits up 7 per cent to reach €330 million.

The company also said that it had experienced double digit sales growth in Eastern Europe, Latin America, as well as the Asia/Africa/Australia region