"We have a strong product development pipeline at our Campinas site and want to grow through local production and better serving our local customers. We also want to grow above the level of economic growth in a sustainable way due to the benefits our ingredients offer in use and by continuing to improve the impact of our operations."
What are Croda’s main focus areas in Brazil?
Croda is a specialty chemical company focused on innovation, sustainability and biotechnology that aims to be the main name in the market behind high value-added ingredients. We are always looking to identify unmet consumer and client needs in high growth markets evading commoditized markets as much as possible. In Latin America, although the majority of our portfolio comes from outside the region, we have three manufacturing sites in Brazil with the biggest one in Campinas, a new one in Holambra after the acquisition of Incotec, a seed enhancement company, and the latest in Porto Alegre after the acquisition of Inventiva, a company specializing in nanotech encapsulation of cosmetic actives.
What has been the impact of the acquisition of Inventiva and Incotec?
Incotec is a remarkable company as its technology increases seed germination from around 75% to 98%. They have found that applying plant protection products directly as a seed coating, rather than spraying the product onto the leaves or ground can reduce the amount required by as much as 80-90%; a tremendous advantage for the product handlers and the environment. They can also add actives and additives to the coatings that promote growth and nutrient uptake, as well as protecting the plant, helping to increase crop yields.
Inventiva focuses on the personal care market but we are looking at how their technologies can be applied to our other sectors as well. Its technology is also extraordinary; essentially, it relies on delivery systems based on natural and renewable ingredients that trigger the effect of an active in a substrate (as skin) in a much more effective way. Croda is upgrading and upscaling a new plant in Campinas based on Inventiva technology. In Porto Alegre we are expanding Inventiva’s current R&D facilities. So far, the growth of both companies has been fantastic and being part of Croda gives them access to more R&D specialists and a global selling network.
Croda has been investing in Brazilian manufacturing since the 1990s. What is the extent of your local production?
Our current Brazilian sales ratio of locally produced to imported is about 25% to 75%. Brazilian markets demand some local production and customization and we have been investing into new chemistries for the Campinas site. Here we mainly make lanolin and esters, which comprise a wide range of products applied into cosmetic, agrochemicals, pharmaceutic and industrial applications, but we also have blending capabilities and a new reactor for polymerics. The major focus for this new reactor is agribusiness and it will enable us to bring important new ingredients to the market.
How important is agribusiness to Croda?
Within Latin America the crop sector is one of our key areas. We sell surfactants for emulsions and adjuvants ranging from simple to high-end polymeric surfactants which ensure a much more robust solution. Our ATLOX™ 4913 product is quite famous. We initially brought this to Brazil and are now producing it locally which has provided a platform to develop new products. We have also invested in new tank farms to upscale and optimize our manufacturing processes. As with health care in Brazil, the crop protection market is highly regulated and our stringent manufacturing processes have enabled us to enter this market, developing special solutions, initially to meet the needs of the Latin American market, but also to export and support customers outside of Latin America from the Brazilian site.
What are some of the benefits of the new innovation center that Croda has established in Campinas?
The center will add more capacity for research into our personal care and life sciences businesses, as well as our performance technology segments, which includes smart materials, energy technologies, homecare and water treatment. It means we can provide a faster response and offer more quality products to our customers. The Latin American market requires more prototypes and formulation suggestions so this center will enable us to spend a higher proportion of time collaborating with our customers in their product development projects. In addition, we will be able to further develop our ingredients, building new molecules and blends that are specifically designed for the local market. The center will also add research capacity to our industrial segments which includes lubricants, coatings and polymers, plastic additives, mining and applications for oil and gas. We also have a lab in Mexico to better serve our clients there.
What benefits will the new distribution center in Campinas bring to your clients and how do you work with distributors?
It is a state-of-the-art automatized facility which is fully aligned with the toughest regulations for health and personal care, providing a very high quality service for our customers. We have our own global sales force that is best placed to sell to our customers, because they can discuss their precise requirements, understanding how we can work with them to help meet unmet consumer needs. To innovate, you need to understand what your customers want and to help us do this throughout Latin America we have our own offices in Colombia, Argentina, Chile, Peru and Mexico.
Brazilian distributors are generally very good because they understand the need to provide clients with value-add services. Croda works with distributors that are very specialized and can add value. For example, we recently finalized a contract with PIC Quimica who are experts in developing high-end ingredients for the cosmetics industry. In other countries we use distributors where the market is very diverse or not large enough for Croda to have a sales presence by itself, such as in Central America, Ecuador and Venezuela. When we use distributors, we like to go with them to visit clients.
What are Croda’s key goals in Latin America in the next few years?
We have a strong product development pipeline at our Campinas site and want to grow through local production and better serving our local customers. We also want to grow above the level of economic growth in a sustainable way due to the benefits our ingredients offer in use and by continuing to improve the impact of our operations. We target customers that value quality, innovation and high level of service.