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Monday, April 13, 2015

Sumitomo Group Entering Cosmetic Ingredients Business In Europe

The Tokyo-headquartered Sumitomo Corporation and Summit Pharmaceuticals International Corporation—known collectively as the “Sumitomo Group”—are in the process of acquiring Kyowa Hakko Europe GmbH, a European subsidiary of Kyowa Hakko Bio Co., Ltd., located in Dusseldorf, Germany.

This European subsidiary is a cosmetic ingredients business, a purchase of which will enable Sumitomo Group to become active in that field IN Europe.

The acquisition will be conducted through Summit Pharmaceuticals Europe Limited (Headquartered in London, U.K., but still run by the Japanese). It is a subsidiary of Sumitomo Corporation that markets pharmaceutical intermediates and raw materials in Europe.

Kyowa Hakko Europe GmbH—the company to be purchased—produces cosmetics ingredients mainly for Germany, but also sells to customers throughout Europe, as well as the Middle and Near East.

When finalized, the Sumitomo Group will obtain the right to market cosmetic ingredients including vitamins and moisturizing agents for hair care and skin care products.

The Sumitomo Group first started its cosmetic ingredients business by exporting ingredients produced in Japan.

Since 2010, the Group has steadily expanded the scope of business by investing in Presperse Corporation and Cosmotec International Especialidades Cosmeticas Ltda., leading cosmetic ingredients suppliers in the U.S. and Brazil, which are the largest cosmetic ingredients markets in the world. 

By acquiring the Kyowa Hakko Europe GmbH, the Sumitomo Group will make full entry into the European market, which accounts for approximately 30 per cent of the global cosmetics ingredients market, aiming for synergistic effects with Presperse and Cosmotec.

By securing a business foundation in Europe, the Group hopes to obtain sales channels to reach European cosmetics manufacturers, and furthermore, offer strengthened services to European plants of U.S. cosmetics manufacturers to expand transactions with them.

That means they hope they make more money. I love press releases written for multiple markets. 

Products handled by Kyowa Hakko Europe GmbH will be added to the lineup of highly functional ingredients offered by Presperse and Cosmotec, reinforcing the Sumitomo Group’s overall product portfolio.

Moreover, the Group will strengthen cooperation among Group companies and collaborate with ingredients manufacturers to proactively develop and propose ingredients tailored to customer needs.  

The cosmetics market, including skin care and hair care products, boasts a size of around $460-billion (retail-basis) worldwide, and is the second-most promising market after pharmaceuticals market.

The cosmetics market is expected to continue growing rapidly at the rate of four to five percent a year owing to giant markets including Europe, the U.S. and Japan achieving strong performance and newly emerging countries including Brazil and Southeast Asian countries serving as driving forces.

By establishing a business foundation in Europe in addition to the U.S., Brazil, Japan and China, the Sumitomo Group will be equipped to serve all the major markets in the world.

Having already accomplished its initial sales target of $100 million, the Group will raise the bar and aim at generating annual sales of $200 million dollars over the next three years.

Outline of the Business
  • Location: Dusseldorf in Germany;
  • Type of Business: Distribution of cosmetic ingredients in the Europe and the Middle East;
  • Products: Cosmetic ingredients including vitamins and moisturizing agents for hair care and skin care product;
  • Suppliers: in China, India, and Japan etc.;
  • Clients: Major cosmetic manufacturers and distributors in the Europe.
And there you have it - Japan creeping (still) into Europe,
Andrew Joseph 

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