Close-to-market and innovation are key reasons ingredient suppliers move into China

By Andrew McDougall

- Last updated on GMT

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Close-to-market and innovation are key reasons ingredient suppliers move into China
More and more cosmetic ingredient companies are growing their presence in China as they look to take advantage of R&D opportunities and being close to local customers in the fast-growing market.

China has been one of the most lucrative emerging markets in the cosmetics industry, and according to recent figures from event organisers of PCHi, the market for personal care and home care grew at an annual compound growth rate of over 12 per cent between 2011 – 2014.

In the last month, a number of Europe’s ingredient players have announced plans to expand into and develop the market, as they look to gain a strong foothold in the market.

R&D focus

Specialty chemicals firm Evonik strengthened its research and development efforts in Greater China looking to boost local innovation; investing €18m in expanding its centre in Shanghai Xinzhuang.

The expansion included the construction of a four-storey R&D building of more than 10,000 square metres, and is scheduled to be inaugurated in mid 2013.

“The rapidly increasing demand for R&D facilities in Shanghai reflects our strong focus on ‘innovation in China for China’, which is one of our key success factors for our growth in Asia, especially in the Greater China region,”​ said Dr Dahai Yu, member of the Executive Board at the Germany-based firm.

Support local customers

Fellow German chemical company Oxea is looking to capitalise on local customers in China as it announced it will build its first chemical plant in the region for the production of its oxo derivatives that are used in personal care products.

Oxea has targeted Nanjing for the construction of its new facility and is expected to start building next year with the plant expected to be fully operational by 2013.

"China is the main growth engine for the Asia-Pacific region, and at this strategic location our new plant will greatly support our local customers there,”​explained Miguel Mantas, executive board member for marketing and sales.

Local demand growing

A joint investment between Wacker and US-based Dow Corning for a manufacturing site in the Jiangsu province has been expanded further with another plant to meet growing local demand for silicones.

“The new facility will allow us to respond quickly to local market needs and to improve customer services in the region. We are further able to provide silicone products that meet international quality standards and thus drive the sustainable development of the silicone industry in China,”​ commented Wilhelm Sittenthaler, board member of Wacker Chemie AG.

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