Chemical ambition Cheminova

CHEMICAL AMBITION

Danish fine chemicals manufacturer Cheminova AS has enjoyed considerable growth in recent years thanks to a refocus of its product portfolio and a clear business strategy. Emma-Jane Batey interviewed president of communications Lars Erik Pederson to find out how this is being carried forward.

IN the three years since Industry Europe last interviewed Danish fine chemicals manufacturer Cheminova AS, the company has transformed its product portfolio and achieved a growth of 28 per cent. Well known for its production of insecticides, herbicides and fungicides for crops and pests, Cheminova now employs around 800 people in Denmark and 1200 abroad, a steady increase of more than 10 per cent from the figures in 2008. The company’s financial figures also show a comfortable comparison to the heights of 2008, with the 2010 figure of DKK 5.6 billion above the DKK 5.2 billion posted in the strong market of 2008. Continued strength

President of Communications Lars Erik Pederson is clear that the company’s continued strength is as much to do with careful strategy and a skilled workforce as its transformed product portfolio. He told Industry Europe, “Over the past three years Cheminova has worked hard to keep our product portfolio relevant, competitive and customer-focused. Previously we were rather dependant on glyphosate, so our product reorganisation is now significantly more balanced, which we have achieved through the development of and growth from new products. The revenue from new products is more than DKK 1 billion and accounts for more than 60 per cent of our sales, so we know that our transformation strategy is a successful one, particularly as it was executed during a period of difficult global economic conditions.”

With broad-spectrum systemic herbicide glyphosate now only accounting for 15 per cent of Cheminova’s revenue compared with 33 per cent in previous years, the company is well-positioned to continue to move away from glyphosate dependency and toward more niche weedkiller products.

Cheminova AS is based in Lemvig, Denmark, and has its main business area

within plant protection products. Cheminova products are available worldwide thanks to its 20 subsidiaries in key countries and an expansive network of distribution partners.

Differentiated products

The new product focus has further helped the company to expand its geographical market share, which Mr Pedersen appreciates is a key element in its continued success. He added, “We have created and continue to create a more balanced and differentiated product portfolio which is contributing to improving our margins across the range. We have a solid presence with an enviable global market share, which we have created through careful partnerships with our distributors and strategic maintenance of our 20 subsidiaries.”

Sustainable growth is also a hot topic at Cheminova, with sophisticated analysis of conditions which can affect its growth such as agricultural developments, climate issues and the development of the global economy all playing a part in its strategic development.

All these factors have been taken into consideration with the Cheminova ‘Five in Fifteen’ strategy. Mr Pedersen explained, “We have ambitious future targets that will see us build on our successful history. We are committed to moving forward wherever possible while always staying close to our fine chemicals roots. The ‘Five in Fifteen’ business strategy has been devised to outline our plan to grow by five per cent by 2015, which will be a doubling of our global market share. We will achieve this

A world of logistics

Danish logistics group, IAT, experiences great success with their one-stop-shopping services. IAT offers transportation and logistics services for packed and bulk cargo by road, rail, air and sea. IAT has a full scale program for transportation and handling of liquid chemicals in tankers within Europe. IAT offers supplementary services to the chemical industry such as tank cleaning and tank farm for storage, mix and tapping of chemicals. This makes IAT the most complete transport company within the liquid chemical trade in Denmark. Based in Esbjerg, Denmarks no. 1 offshore city, IAT holds an offshore base offering offshore supplies to the oil and gas fields at sea. Also the wind energy sector, on- and offshore, is served with the same high scale knowledge as supplied to the oil and gas industry.

through economies of scale which will significantly contribute to improving earnings and further value creation for the benefit of all our stakeholders.”

The concept of sustainable development and the ‘Five in Fifteen’ strategy incorporates several other activities in order to meet this target. Cheminova plans to continue its long-term dedication to product development, maintaining a highly trained, skilled and loyal workforce, and staying close to the market. Mr Pederson pointed out that understanding the changing needs of its customer base is integral to achieving the commercial aims of the company, as well as its commitment to delivering a responsible and reliable service.

One such example of the ever-changing demands of the global fine chemicals market is the recent vote by EU member states to allow malathion back on the market. This non-systemic crop insecticide has been out of the European market since December 2008, and now it can be reintroduced Cheminova has a good platform for its malathion EW formulation in Europe over the next three to five years.

Mr Pederson concluded, “Our parent company Auriga offers us the strong infrastructure we need as well as access to considerable investment when needed to boost our fine chemicals production capabilities, and the Cheminova history and expertise means that investment is carefully utilised to deliver the best possible return for our company, our shareholders and our customers.” n