• briefing asia infrastructure aug 15, 2006 • briefing asia energy aug 15, 2006

investigating cellular regulation of hair and skin in order to identify potential actives and using nanotechnology to create toothpastes that repair sensitive teeth.
Will Henkel Sweat Over its $420 Million Acquisition?
Henkel's $420 Million Purchase of three antiperspirant and deodorants brands from Procter & Gamble has given it a stable of products with sales of $275 million and moved the company into what it contends is the No. 3 position in the U.S. deodorant market.
According to company officials, Henkel's purchase of Right Guard, Soft & Dri and Dry Idea will help it expand the German company's presence in the body care sector.
"This acquisition will enable us to significantly expand our body care business in North America and will further strengthen our participation in the growth of this segment. The strong brands involved provide a perfect fit with our existing personal cleansing business in the U.S.," explained Hans Van Bylen, executive vice president cosmetics/toiletries of Henkel KGaA in a press statement when the deal closed in May. "The deodorant and antiperspirant market is highly attractive and we are delighted to be able to substantially strengthen our Dial platform with these acquisitions.
This transaction will take us to No. 3 in the attractive U.S. deodorant market."
For Henkel, the most prominent brand in the deal, Right Guard, brings a viable contender in the male side category, which is new territory for the company.
"Dial and a lot of our current brands--Tone and Pure & Natural--are either female-skewing or are all-family brands. So now we have a strong male entry; the male personal-grooming segment is really growing. There's a growing trend where personal care brands are skewing either male or female, and with this stratification, we want brands that can play in either segment," Scott Moffitt, Dial Corp.'s senior vice president for personal care and grooming, told Adweek.com in early June.
Although a strong brand with a solid history, Right Guard's sales have been sluggish at best in recent years. According to IRI, Right Guard's sales have slipped 1.9% in the 52 weeks ended April 16, following a sales decline of 0.8% in 2005 and 7.1% in 2004. The question is, can Dial can revive Right Guard and make it a formable candidate to P&G's Old Spice and Unilever's hot Axe brand?
"Right Guard has a strong brand equity. Henkel could grow that brand," said" Jason M. Gere, associate vice president, securities research-household products for A.G. Edwards & Son in New York City.
4. Reckitt Benckiser
United Kingdom
www.reckittbenckiser.com
Sales: $7 billion
Sales: $7 billion for household and personal care products. Corporate sales: $7.6 billion. Net income: $1.2 billion.
Key Personnel: Bart Becht, chief executive officer; Colin Day, chief financial officer; Alain Le Goff, executive vice president, supply; Elio Leoni Sceti, executive vice president, Europe; Rakesh Kapoor, executive vice president, category management; Gareth Hill, senior vice president, information services.
Major Products: Fabric care--Vanish, Spray 'n Wash, Resolve, Napisan and Oxyclean fabric treatments; Woolite garment care; Calgon water softener, Quanto and Flor fabric softener; Dosia laundry detergent. Surface care--Lysol, Sagrotan and Pine-O-Cleen disinfectants; Harpic and Lysol lavatory; Veja and St. Marc all-purpose; Easy-Off, Mop & Glo, Brasso, Lime-A-Way, Destop, Cillit; Poliflor, Old English, O'Cedar and Mr. Sheen polishes and waxes. Dishwashing--Calgonit, Finish, Electrasol and Jet Dry. Home care--Air Wick air care, d-Con, Mortein, Shieldtox, Target, Rodasol, Pif Paf and Tiga Roda pest control; Nugget and Cherry Blossom shoe care; Health and personal care--Detol antiseptics, Veet depilatories, Kukident and Steradent denture care.
New Products: Airwick Freshmatic, Cillit/Easy-Off Barn, Finish 4in1, Vanish Oxi Action Max.
Comments: Corporate sales rose 8%, last year, while household and personal care sales increased 6%. The company said growth was strong in all regions, driven by several successful new product launches. In Europe, which accounted for 51% of sales, revenue rose 4%. In fabric care, Vanish with Vanish Oxi Action Max and Vanish Dual Power provided a boost. In surface care, Cillit Bang provided a lift and in automatic dishwashing, growth was due to Finish/Calgonit 4in1. Home care sales and health & personal care sales were up as well.
In North America, which accounted for 31% of sales, net revenue rose 5%. Sales of fabric care were up on the strength of Spray 'n Wash Dual Power Fabric Treatment and Resolve Dual Power carpet cleaner. Surface care sales increased due to the growth of Lysol disinfectant spray and the launch of Easy-Off Barn. Automatic dishwashing sales were up on increased sales of Electrasol with Jet Dry Action. In personal care, strong Veet depilatory sales provided a lift.
Developing markets accounted for 18% of sales and there was strong growth in all categories. Pest control sales were up sharply following the launch of Mortein Power Booster coils.
By product category, fabric care sales rose 2%. Surface care sales increased 9%. Dishwashing sales increased 6%. Home care sales rose 8% and health and personal care sales increased 9%.
On Feb. 1, 2006, Reckitt Benckiser completed the acquisition of Boots Healthcare International. The purchase gives the company three power brands: including Clearasil, Nurfen and Strepsils.
"We are excited at getting ownership of BHI," said Mr. Becht. "It will give us a platform for additional growth at very attractive margins. BHI brings three new power brands whose distribution can be substantially expanded over time. In 2006, our major focus for this business will be on successful integration and extracting the promised synergies while gradually preparing the business for growth."
For the first quarter of 2006, revenues jumped 18%, but net income fell due to the BHI acquisition. The company credited the increase on strong sales of products such as Vanish Oxi Action Crystal White, Cillit Bang Stain and Drain and Airwick Freshmatic.
"Reckitt Benckiser made a strong start to 2006 with underlying growth on the base business of 6% and a better than expected contribution from BHI in its first two months," said Bart Becht, the company's chief executive officer. "The integration of BHI is proceeding on plan and we are increasingly confident of delivering the promised synergy targets."
A Tree Grows in Canada
RECKITT BENCKISER is going green in a big way. In June, the company launched Trees for Change, a major forestation project offsetting two-years of greenhouse gas emissions from its global manufacturing energy use. The company calls Trees for Change one of the largest projects of its kind, with more than two million trees being planted on previously deforested land in British Columbia, Canada.
In creating more than six square miles (more than 15 square kilometers) of new forests, Trees for Change will increase carbon uptake, absorbing more than one million tons of carbon dioxide as the trees grow to maturity during the next 80 to 100 years.
5. Kao
Japan
www.kao.com
Sales: $6.9 billionn
Sales: $6.9 billion for personal care, household care and personal hygiene products. Corporate sales: $8.6 billion. Net income: $629 million for the year ended March 31, 2006.
Key Personnel: Takuya Goto, chairman; Motoki Ozaki, president and chief executive officer; Toshio Hoshino, senior executive vice president; Takuo Goto, executive vice president, senior vice president, global production and engineering; Hiroshi Kanda, executive vice president, president, global consumer products; Norihiko Takagi, executive vice president, president, international business--consumer products; Shunichi Nakagawa, executive vice president, vice president, legal & compliance--global vice president, global corporate communications; Masato Hirota, president, global prestige cosmetics; Toshiharu Numata, president, global R&D; Toshio Takayama, chairman, Kanebo Cosmetics; Shigeru Koshiba, president, global fabric and home care; Michitaka Sawada, vice president, global research and development (feminine and baby care); Masumi Natsusaka, president, global personal care (skin care and hair care); William J. Gentner, president and chief executive officer, Kao Brands.
Major Products: Laundry and cleaning products--Attack, Just, Bio Beeds and Zav detergents; Smoother spray starch; Humming 1/3 and Touch fabric softeners; Haiter bleach; Quickle Wiper, Quickle toilet bowl cleaner and Quickle Wiperfloor care; New Beads; Family and More dishwashing detergents; Foaming cleanser; Magiclean household cleaner; Tsuyadashi Mypet floor cleaner; Haiter mold remover; Halter kitchen cleansing foam; Glass Quickle cleansing kit for windows. Personal care--Lavenus hair care; Merit, Essential, Jenne shampoos and conditioners; Biore facial cleansers; Blaune semi-permanent hair color; Sofina Medicated Whitening skin care; Sofina Aube makeup; Clear Clean toothpaste; Bub bath additives; Liese Excellent hair styling product; and Jergens and Cured skin care.
New Products: Kanebo cosmetics (acqusition).
Comments: Corporate sales rose 3.7%. Sales of consumer products rose 2%. More specifically, personal care sales rose 4%, fabric and home care sales were up 1.4%, but feminine care and baby care sales declined 6.9%. Meanwhile, sales of prestige cosmetics jumped 8.9%.
But of course, these results don't include results for Kanebo Cosmetics, which Kao acquired late in the fiscal year. When the next fiscal year ends on March 31, 2007, company executives expect corporate sales to jump nearly 25% due primarily to the Kanebo acquisition. In fact, prestige cosmetics sales are expected to surge 240% to $2.5 billion. In contrast, personal care sales are expected to gain just 2.2%, fabric and home care sales will rise 2.3% and feminine care, baby care and other segments will grow 1.2%.
Clearly, Kao is counting on Kanebo to drive growth in 2006. The Kanebo brand has a strong presence in Japanese prestige and mass channels and together with Kao's existing cosmetics portfolio, company executives are confident that they can offer Japanese retailers some comprehensive merchandising proposals, while at the same time accelerate global expansion of the cosmetics business.
In other sectors, Kao is committed to expanding its functional food and non-pharmaceutical health products with the introduction of the Enova cooking oil in North America and the continued success of Healthya Water sports drink.
6. Shiseido
Japan
www.shiseido.co.jp
Sales: $5.9 billion
Sales: $5.9 billion. Net income: $127 million for the year ended March 31, 2006.
Key Personnel: Shinzo Maeda, president and chief executive officer; Yasuhiko Harada, executive corporate officer; Tadakatsu Saito, corporate senior executive officer, chief area managing officer of China, chairman of Shiseido China; Yoshimaru Kumano, corporate executive officer, global R&D; Tamio Inaba, corporate officer business strategy and marketing of cosmetics; Kohei Mori, corporate executive officer, information system planning and logistics; Masayuki Ishimaru, corporate officer, general manager of sales department and specialty stores; Toshiro Nagaya, corporate officer, production; Kiyoshi Nakamura, corporate officer, technical affairs; Kazuko Ohya, corporate officer, general manager, corporate culture; Kazutoshi Satake, corporate officer, domestic non-Shiseido brand business; Kazuo Tokubo, corporate officer, R&D strategy, patent and basic research; Takemasa Yamanaka, corporate officer, healthcare and frontier science, general manager of healthcare and president of Shiseido Pharmaceutical and Shiseido Beauty Foods; Yutaka Yamanouchi, corporate officer and president, Shiseido Amenity Goods; and Toshio Yoneyama, corporate officer, product development and software development.
Major Products: Skin care, color cosmetics, sun care, fragrances, hair care and toiletries sold under the Shiseido, Carita, Za, Zotos, 5S and Beaute International brands.
New Products: Tsubaki hair care, Kuyura soap and Sengan Senka facial cleanser. To be launched: Elixir Superieur skin care and Integrate makeup.
Comments: Sales rose nearly 5% last year and the company reported a modest net income after posting a loss in 2004. By sector, cosmetics, which accounted for nearly 80% of sales, rose 5.6%. Domestic cosmetic sales were up 2.2%, but international sales surged 13.3%. Sales of toiletries (9.l% of sales) were up just 1.1%. Professional product sales (5.2%) rose 7.9%. Pharmaceuticals (1.8%) sales rose 3&. Sales of health and beauty foods (1.9%) fell less than l%.
Domestic cosmetic sales received a boost from the reworking of brand strategy, while the gain in overseas sales came from a substantial increase in China.
In domestic toiletries, Shiseido focused on shampoos and conditioners, body soaps and facial cleansers. In addition the launch of the hair care megabrand Tsubaki, Shiseido also rolled out Kuyura soap and Sengan Senka facial cleanser.
By region, sales in Japan increased less than 2%. Sales in the Americas rose 6.8%, while European sales rose 7.3%. The gain in Europe was attributed to solid fragrance sales. But the best regional performance was turned in by Asia/Oceania. There, sales jumped more than 22%, led by big gains in China.
In the recently concluded fiscal year, Shiseido completed the first year of its three-year restructuring plan. According to company executives, Shiseido largely exceeded the original forecast and expects further reforms this year and next year will increase both growth and profitability.
Chief among these new initiatives is the integration of the cosmetics and toiletries businesses.
"Since assuming the post of president and CEO, I have continuously declared that I am 'prepared to break down the company and rebuild,' in addressing these reforms. This fiscal year, I will finally carry this out," insisted Shinzo Maeda, the company's president
As a result, Shiseido's cosmetics, toiletries and other segments have been reworked into domestic cosmetics, overseas cosmetics and others. With a new structure in place, the company is now revamping its brand strategy, accelerating expansion in China and other growth markets, while reforming sales operations by creating channel-specific sales teams that match customer purchasing behavior. The pillar of the brand strategy is to create "mega line" brands such as Maquillage and Uno cosmetics.
The company has launched two new businesses as well: healthcare and frontier science. The healthcare business provides foods and over-the-counter drugs to meet beauty- and health-promotion needs of a broad range of customers. The frontier science business provides medical-use drugs, raw materials developed from cosmetic ingredients, cosmetic dermatology treatments and other products to doctors and research institutes.
Sales in China grew more than 30% last year. In November, Shiseido expanded its China Research Center, making it 10 times larger than the previous facility.
7. Beiersdorf
Germany
www.beiersdorf.com
Sales: $5 billion
Sales: $5 billion (estimated) for cosmetics and toiletries. Corporate sales: $5.9 billion. Net income: $417 million.
Key Personnel: Thomas-Bernd Quaas, chairman, executive board, strategic corporate development, corporate communication, corporate auditing; Peter Kleinschmidt, executive board member, human resources, administration, environmental protection; Pieter Nota, executive board member, brand marketing, research and development and sales; Markus Pinger, executive board member, supply chain, procurement, production, logistics and quality management.
Major Products: Cosmetics and toiletries marketed under 10 brands--Futuro, Eucerin, La Prairie, Estoplast/Hansaplast, Nivea, Atrix, Juvena, Labello, Florena and 8x4.
New Products: La Prairie Silver Rain fragrance, Nivea Visage Sensitive Balance, Nivea Hair Care Color Shine, Nivea Deo Pure.
Comments: Corporate sales rose nearly 5% last year, while consumer product sales increased a little more than 5%. By region, Europe accounted for 73.2% of corporate sales; the Americas, 14.4% and Africa, Asia and Australia, 12.4%. But the company noted that gains in the Americas were primarily due to good sales in Latin America and a strong showing by La Prairie in the U.S.
Although tough economic conditions in Europe put a drag on sales gains, the region still posted a 3% rise in sales. In Western Europe, excluding Germany, sales rose 2.6%, helped along by gains in Spain. Sales in Germany were up less than 1%, but demand for Nivea for Men was strong. Eastern European sales jumped more than 12%, led by big gains in Russia and Poland. North American sales rose 3.2%. Nearly all countries in the region recorded growth, with the exception of Mexico, where company executives blamed the impact of hurricane damage on market growth.
Several Beiersdorf brands put in a good showing in many parts of the world. Nivea sales rose in all regions, led by good performances from Nivea for Men, Nivea Deo and Nivea Hair Care Styling. Eucerin's sales jumped more than 10%, helped along by the relaunch of Eucerin Sensitive Skin. In the high-end cosmetics segment, La Prairie sales jumped 11.2% on the strength of the Silver Rain fragrance launch.
For the first quarter of 2006, corporate sales rose 8.7% to $1.5 billion. Consumer sales were up 8% to $1.3 billion. Nivea sales rose 7.1%, driven primarily by Nivea Beaute, Nivea Hair Care Styling and Nivea for Men. Eucerin and La Prairie also generated above-average growth rates.
On July 19, Beiersdorf announced it is considering selling Hirtler, its wholly-owned subsidiary in Heitersheim. The company produces high-quality soap for Beiersdorf and third-party suppliers.
8. LVMH
France
www.lvmh.com
Sales: $2.8 billion
Sales: $2.8 billion for cosmetics and toiletries. Corporate sales; $17.3 billion. Net income: $3.4 billion.
Key Personnel: Bernard Arnault, chairman and chief executive officer; Antonio Belloni, group managing director.
Major Products: Fragrances and cosmetics sold under such brands as Christian Dior, Guerlain, Givenchy, Keinzo, Benefit, Fresh and Makeup Forever.
New Products: Miss Dior Cherie, Dior Homme and SummerbyKenzo fragrances, KissKiss lipstick, Capture Totale skin care and makeup and Orchidee Imperiale skin care.
Comments: Corporate sales increased 11% and net income increased 16%.
Perfumes and cosmetics posted organic revenue growth of 7%. Revenue rose for all brands and especially for Parfums Christian Dior, due to the successful launch of Miss Dior Cherie and Dior Homme. Furthermore, skin care and makeup lines reported strong sales across all brands, while on the regional level, Asian countries posted the strongest growth.
For the first quarter of 2006, corporate sales jumped 15% to $4.3 billion and perfume and cosmetics sales surged 18% to $718 million. Leading the way was the extraordinary success of the Capture Totale skin care range and its makeup lines. In perfumes, existing products continue to grow well and contributed to the strong revenue growth. Guerlain's new Orchidee Imperiale skin care product was well received and revenue of Parfums Givenchy was driven by 'vintage' expressions of its Organza, Amarige and Very Irresistible lines. BeneFit Cosmetics recorded another period of double-digit revenue growth.
9. Lion
Japan
www.lion.com
Sales: $2.1 billion
Sales: $2.1 billion for household and personal care products. Corporate sales: $3 billion. Net income: $49 million.
Key Personnel: Sadayoshi Fujishige, president.
Major Products: Oral care (including toothpaste, toothbrush, mouthwash, breath freshener and dental needs), beauty care (shampoo, conditioner, styling products, hair restorer, men's cosmetics, soap, body soap, skin care, antiperspirant and deodorant), fabric care (laundry detergent, bleach, fabric softener), home care (household cleaner, deodorizers, air fresheners, dishwashing detergent and kitchen-related products).
New Products: Clinica Toothpaste for Caries Risk Control, Clinica Toothbrush Shokubutsu-Monotari Herb Blend Shampoo, Shokubutsu-Monogatarii Herb Blend Conditioner, Shokubutsu-monogatari Herb Blend Body Wash, Liquid Heyaboshi Top Laundry detergent, Kaori to Deodorant no Soflan fabric softener, Heyaboshi Soflan fabric softener and Charmy Liv Mild dishwashing detergents.
Comments: Sales of home products rose 3% last year but results were hurt by rising crude oil prices and declining retail prices. Specifically, the household product market in Japan encountered bleak business conditions amidst price-cutting of laundry detergents and fabric softeners by retailers. Still, Lion strengthened its domestic home products business with the introduction of differentiated products while utilizing strategic marketing investment in principal products to pursue its aim of creating No.1 brands with [yen]10 billion in sales. Outside Japan, Lion is focused on reinforcing its business foundation by streamlining sales systems and advertising core brands, in preparation for developing the home products business in Korea that was acquired at the end of the previous fiscal year.
Within oral care, Dentor Systema is Lion's comprehensive brand for gum disease prevention. To expand Dentor Systema's success, the company introduced a mouthwash and interdental products with innovative technology. A new Clinica Kid's series, which proposed a new cavity prevention lifestyle for parents and children, enjoyed favorable toothpaste, toothbrush and dental rinse sales. In the toothpaste business, Lion launched an improved Clinica Toothpaste for Caries Risk Control that promotes re-mineralization of teeth and introduced a new flavor of Prime Stain Off that restores teeth to their original whiteness and sparkle. Despite these moves, the overall sales of toothpaste were stagnant due to severe market competition. Within the toothbrush segment, Dentor Systema recorded a strong performance due to its clear, appealing message of gum disease prevention. During the year, Lion upgraded the Clinica toothbrush for more effective brushing behind teeth and better access to rear teeth, places where plaque can easily build up. Sales of mouthwash were up from the previous year; owing to the launch of Dentor Systema Dental Rinse which is said to penetrate deep inside biofilm to kill bacteria.
Overseas, demand for the Systema series grew significantly in Thailand. Elsewhere, Lion expanded its selection of toothpastes and toothbrushes in China, resulting in a sales gain of 11%.
Within the beauty care category, Lion introduced Kireikirei gargle, which is highly effective in sterilization. The launch, coupled with existing hand soaps and body washes, is part of Lion's strategy to develop a brand that promotes hygienic lifestyles. In other personal care categories, sales of shampoos and conditioners rose significantly due to the launch of Shokubutsu-Monogatari Herb Blend Shampoo and Shokubutsu-Monogatari Herb Blend Conditioner, along with the popularity of Soft-in-One moisturizing shampoo with seaweed extract. However, sales of hand soaps were sluggish due to intensifying market competition.
In the field of body washes, Lion introduced new products Shokubutsu-Monogatari Herb Blend Body Wash and Kireikirei Medicated Body Wash that contains sanitizing, deodorizing ingredients to prevent body odor and the smell of sweat.
Within the household products business, Lion made steady progress in restructuring its sales network for greater profitability. Despite the emphasis on cost-cutting, Lion still improved its mainstay laundry detergents, including Top, which breaks down sebaceous stains from body oils and Heyaboshi Top, which controls unpleasant odors. Lion also enhanced the effectiveness of Acron, a delicate fabric wash that prevents clothes from losing their style and fit. Finally the company introduced new Liquid Heyaboshi Top.
Despite the company's efforts, overall sales of laundry detergents declined from the previous fiscal year against the backdrop of intensifying competition. Sales of bleaches increased, owing to the steady performance of Temanashi Bright and the development of Super Temanashi Bright which contains powerful stain-removing additives. Lion introduced the new fabric softeners Kaori to Deodorant no Soflan with superlative odor protection and Heyaboshi Soflan which controls the cause of musty smells. As a result, sales of fabric softeners recorded strong year-on-year growth. Overseas sales expanded overall to levels twice those of the previous fiscal year. This result can be attributed to the strong performance of laundry detergent Top in Singapore, soaring demand for the new hang-to-dry indoor type laundry detergent Pao in Thailand, and quality enhancement of Beat, a laundry detergent sold in South Korea.
For the first quarter of 2006, corporate sales were essentially flat at $560 million. Yet, Lion reported a net loss of $23 million. The company blamed the flat sales results on higher crude oil prices, intense competition in the laundry care sector. The loss was due to costs associated with an aggressive capital