Cognis boosts its Malaysian presence

By Jane Byrne

- Last updated on GMT

Related tags: Nutrition, Corporation

Cognis has set up an affiliate in Malaysia to maximise what it views as the growth potential for wellness products in that country.

The ingredients supplier said it plans to build on its trading presence in Malaysia with the opening of a wholly-owned subsidiary based in Selangor, Cognis Malaysia Sdn. Bhd.

The company views the establishment of a dedicated commercial and technical team on the ground as a vital step towards fulfilling its goals of doubling Cognis’ sales in Malaysia over the next five years, and to intensify contact with customers, distributors and suppliers in the country to raise awareness about its products and services.

Cognis said it has enjoyed high sales growth in the Asia Pacific region, with its activities in Malaysia experiencing rapid growth in recent years, and it said that the subsidiary will employ a total of 15 technical and sales staff to work on behalf of its three main business units – Care Chemicals, Nutrition & Health and Functional Products.

The German company said the affiliate will enable it to improve its understanding of the Malaysia market, quickly anticipate developments and therefore exploit new business opportunities.

Market in infancy

A spokesperson for the company told NutraIngredients.com that one of the objectives of the new subsidiary is to develop the functional foods side of the business in Malaysia, a sector which is only in its infancy in that country.

But she said that this resource boosting programme for the business in Malaysia will not include production facilities.

The Malaysian subsidiary further extends Cognis’ reach in the Asian region, as it also opened an affiliate in India last year, following on from the establishment of a liaison office there in February 2008, which the company claims resulted in a 30 per cent rise in turnover.

“Many of our existing and potential customers are also exploring business opportunities in India, and our direct links in the country have enhanced our customers’ confidence,”​ said Guido Appl, general manager of Cognis India at the time.

Sales fall off

Cognis has pursued a “health and wellness” strategy over the past few years. This has helped the German company obtain high growth rates but the recession has turned the upward trend on its heels.

In November, Cognis reported a 6.8 per cent decline in nutritional and health product revenue for the first nine months of 2009.

But despite the significant fall off, “nutrition and health” was actually the best performing division for the company.

Overall sales in the first three quarters of the year were down 15 per cent on the same period in 2008 to €1,957m. But there is evidence that sales are beginning to pick up.

“Sales volumes are still relatively low, but they continue to move in an upward direction,” ​claimed Cognis CEO Antonio Trius.

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