How is Symrise “diversifying success and successfully diversifying”?

Symrise has set itself some ambitious goals in terms of business development. The company aims to continue growing faster than the market and to do so profitably. To get there, the company is pursuing a strategy based on three pillars: growing the Group, increasing its efficiency and expanding the portfolio intelligently, as Chief Executive Officer Dr. Heinz-Jürgen Bertram explains in this interview. This can only be achieved if Symrise breaks new ground in the right areas.

Dr. Heinz-Jürgen Bertram

Dr. Heinz-Jürgen Bertram has a PhD in chemistry and has been working at the company since 1990, when he joined the research department at Haarmann & Reimer. Since the IPO in 2006, Heinz-Jürgen Bertram has been a member of the Executive Board. Initially he was responsible for Flavor & Nutrition. He was appointed Chief Executive Officer in August 2009, and his contract has again been prematurely extended to 2022.

Dr. Bertram, Symrise grew sales to € 2.9 billion and EBITDAN was improved to € 625 million in 2016. Once again, the company has grown well above the market average. What does Symrise do differently from its competitors to achieve this level of success?

We developed a three-pillar strategy in 2009, which we’ve been consistently pursuing and further developing ever since. The focus is on three areas: growth, efficiency and portfolio. We approach these areas individually while always taking into account how they work in harmony with each other. At the same time, whenever it comes to making a decision, we think about how to distinguish ourselves from the competition through special concepts, acquisitions and innovations, which means we also explore diverse areas outside of the classic fragrance and flavor market.

Let’s take a moment to talk about growth. How does Symrise position itself in this area?

Over the past six years, we’ve grown approximately twice as fast as the rest of our market. It’s only by operating on different levels that we’re able to achieve this. To begin with, organic growth is important to us, and takes the form of expanding and, in part, redefining our traditional business units through innovation and new products. One example of this – and there are many – is the Fragrances division, in which we’re currently repositioning ourselves. We utilize our traditional strengths in the development of new fragrances, draw on our extensive product base and, at the same time, promote the use of sustainable raw materials. As part of our efforts to optimize the company structure in 2016, we subdivided the Fragrances division into four global business units: Fine Fragrances, Personal Care, Home Care and Oral Care.

You can’t achieve your goals through organic growth alone. What other areas are you looking at?

While we are focusing on organic growth, we’ve also carried out important, transformational acquisitions over the years – purchases that have significantly changed our portfolio and our structure. With the acquisition of Diana, our product range has entered a whole new dimension. We’re now involved in the pet food market and have significantly expanded in the area of nutrition. Here we also see an example of how, in addition to growth, we’ve successfully pursued another pillar of our strategy-portfolio. With Diana, we’ve perfectly implemented the idea of expanding our portfolio into other areas. We now generate around a third of our sales outside the classic areas of flavors and fragrances.

In 2016, Symrise acquired Renessenz as part of Pinova Holdings. The US-based company manufactures substances for fragrances and oral care products as well as ingredients for foods and beverages. How is integration coming along?

Renessenz has already been fully integrated into the Symrise Aroma Molecules division of the Scent & Care segment. With these steps, we’ve further boosted our ingredient portfolio. As in many other business units, we concentrate on solutions based on renewable materials, and the company is a powerful partner in this respect. Clearly defining the portfolio also meant reselling the technical applications we’d acquired through the acquisition that did not belong to our core business. We will continue to collaborate with the new owners and supply each other with strategically important raw materials, among other things.

2020
– the year by which all strategically important raw materials will be sustainably generated.

In recent years you’ve said that you want to grow in emerging markets in particular. How have you achieved that thus far?

In 2016 we achieved growth of 15 % in this area. Over the medium term, we want to secure a share of sales of over 50 %. We’re working at full speed on innovations for these regions and further developing our infrastructure on a continuous basis. In early summer 2017, we’ll be inaugurating our new development center in Singapore, which is an important hub for Southeast Asia. We’ll be kicking off construction of another site in China, and we established our own company in Iran last year. In this way, we’re taking advantage of the growth opportunities available to us in these emerging regions.

Let’s take a look at the third strategy pillar – efficiency. Have you been able to increase this as well?

We’ve become more and more efficient over the past few years. We’ve enhanced the value chain with several programs in our divisions by improving procedures, optimizing supply chains and thoroughly examining our factories, down to the smallest processes. In research, we’re more and more intensively utilizing technology platforms throughout the entire company for various materials and the products created from them. At the same time, we’re now gaining access to early development stages in our customers’ innovation processes much more often, which is also good for our business. We’re also constantly optimizing our raw materials portfolio in terms of sustainable sourcing.

»We aim to create innovative solutions that respond to needs that have arisen in nutrition, health and well-being.

In our journey to meet this goal, we always keep future generations in mind, from prioritizing social responsibility to creating technologies fit for the future and using processes that save and conserve resources.

With passion and drive, our employees live the Symrise promise of ›always inspiring more…‹ every single day. In this way, everyone at Symrise plays a role in sustainably developing both our company and the world around them.«

IPO as the First Step Toward SuccessSymrise went public on the Frankfurt Wertpapierbörse on December 11, 2006, with an issue price of € 17.25. The company had nearly 5,000 employees at that time and achieved sales of approximately € 1.2 billion. Symrise had been established in February 2003, three and a half years prior, through the merger of Holzminden-based companies Haarmann & Reimer and Dragoco, which had been fierce competitors. This union resulted in the world’s fourth-largest manufacturer of flavors and fragrances, with a market share of nearly 10 %.

Sustainability is a huge issue for Symrise across all areas. What do you do differently in this area that allows you to do so well in a highly competitive environment?

A good example is our raw materials supply. If we’re successful here, it benefits the environment, society and us as a company. One of our biggest goals is to have all of our strategically important raw materials generated sustainably by 2020. We’ll be pursuing several approaches to achieve this, including monitoring the cultivation and processing of important raw materials. In this way, we can ensure the availability of high-quality materials as well as guarantee sustainable cultivation.

Can you name a few examples?

We’re often involved directly in regions from which we source our raw materials, including Madagascar for vanilla, the Amazon region for fragrances, Ecuador for bananas and Germany for onions – and we’re constantly expanding this principle. We also think it’s important to dedicate ourselves to protecting the environment and, in particular, maintaining biodiversity at all our sites and those of our suppliers. It’s only by preserving nature’s diversity that the world can maintain its balance – and it goes without saying that we, our customers and consumers benefit from nature’s bounty, including its countless fragrances and flavors.

Where do you see Symrise in the years to come?

Having promptly established ourselves as a leading company in the industry over the past seven years, our goal can only be to consolidate and expand this position. This, of course, conforms to our focus on growth. We want to achieve this not by being hasty but instead by implementing a well-thought-out and, more importantly, sustainable strategy. One aspect of this is our desire to make our many different areas of expertise much more interconnected, which promotes synergies. We can address brand-new customer groups with the new products that come from these connections. And that makes it all the more important for us to allow our researchers and developers plenty of scope for innovation. More and more often, innovations these days are based on methods of green chemistry and biotechnology in product development. At the same time, research needs to be perfectly aligned with the markets, which we can ensure through tight-knit networking within the company along the entire value chain – and this is where we come full circle. These days, innovations primarily occur because we know the customers and consumers so well. This is where Symrise excels.

In 2016 you celebrated the anniversary of the IPO, which took place in 2006. How would you evaluate these past ten years?

As a success story. As a company we’ve done excellent work as well as made exceptional use of the financial market instruments. In this way, we’ve managed to more than double our sales, profit and net income during this period as well as increase the company value, which has also benefited our shareholders. Rather than resting on our laurels, this success has encouraged us to continue along our sustainable journey.