The Value Added figure, also known as Gross Value Added (GVA), was derived from the operations of the fragrance industry and its suppliers, as well as from employee spending.
According to the report conducted by PricewaterhouseCoopers (PwC) on behalf of the International Fragrance Association (IFRA), the fragrance industry generates €7.2bn ($7.9bn) of total Value Added globally.
Martina Bianchini, President of IFRA, noted: “[The fragrance industry] is relatively small but when you look at the added value that it adds, particularly upstream, you see our industry is responsible for a huge number of jobs upstream.”
She added that Singapore was a “manufacturing and innovation hub” and contributed significantly to the global fragrance industry.
Growth in Asia assured?
Bianchini expects Singapore and the APAC region as a whole to continue seeing “great” growth in the fragrance sector.
The report highlighted Asia is a massive part of the fragrance industry, almost equalling Europe in terms of value addition.
APAC’s fragrance industry contributes up 42% of worldwide Value Added, with China the single largest contributor globally at €1.54bn ($1.69bn)
In terms of employment, APAC leads the way by supporting 88% of jobs generated by the fragrance sector. This is largely contribution from India, China and Indonesia, who are the largest producers of important naturals such as cedarwood and patchouli.
“Asia is a big sourcing hub for the fragrance industry with countries like India, Indonesia and China being the global hubs for sourcing of natural materials,” said Bianchini.
V. Ramkumar, vice president of Symrise APAC scent & care division and IFRA member, elaborated: “These three are extremely important countries for the fragrance industry… First as a fragrance manufacturer which sells to their respective domestic markets.
“The second and more important aspect is we source a lot of materials from these three countries, both natural and synthetic chemicals. In that perspective, these three countries contribute significantly to the global fragrance industry.”
Bianchini said that LATAM could potentially rival Asia in terms of growth. However, the region lacks the political stability Asia has at the moment.
“LATAM could grow rapidly but the political environment is not as favourable. The countries there don’t function as well as the countries in Asia. Here in Asia, it is generally peaceful, politically stable and has [knowledgeable] consumers.”
She added that the current political issues in Hong Kong for instance, will unlikely affect the fragrance industry.
“Looking at the growth of the market, there is still a huge demand of people who want to improve their daily lives with wonderful products.”