Chemical ingredients for cosmetics are vital for growth in the cosmetics market. These ingredients, particularly those which are imported, have undergone adjustment over the course of recent years and have added to the costs of cosmetics manufacture in Brazil. As most of the manufacturers working in the cosmetics market use imported ingredients, this year cosmetics companies and their consumers will see the value of their products impacted by this market.
Brazil is the world’s third-largest consumer market for beauty products, and while it has an optimistic outlook for growth, the challenges it faces will be greater than those of a decade ago. So says the study performed by Factor-Kline, the results of which pertaining to the cosmetics market in Brazil will be announced at the FCE Cosmetique Congress (12-14 May).
The study evaluated more than a hundred toiletries ingredients, divided into eight main categories from suppliers’ viewpoints: type of ingredient and application, including preservatives, conditioning polymers, surface active agents, emollients, emulsifiers, hair fixative polymers, UV blockers and rheology modifiers.
Brazil’s ingredients market was estimated by Factor-Kline as being about USD 1.1 billion (ex-factory) in 2013, with estimated growth of 3-4% for the coming years.
Total sales in 2013: USD 1.1 billion
This market is composed predominantly of European and American companies working in the Brazilian market either directly or through several levels of distributors, penetrating the market from medium to small companies.
Kline & Factor´s study reveals that Brazil was the world’s largest region in hair care in 2013; that 86% of women have dyed their hair at least once, and that 70% of the population has curly or wavy hair. Brazil is also a market of 9% in the skin care sector, and 67% of the population has mixed or oily skin.
As Brazilian women are increasingly demanding over hair care products and the feel of products for the face, the Brazilian market has great growth potential for chemical ingredients companies, especially those delivering innovation and technologies to cosmetics companies.
The study evaluated the size of the market of special active ingredients by product category and function; growth prospects within each category and functionality of special active ingredients; main suppliers, and how mergers have shaped the market, among other issues.
In recent years, many of these companies have pursued acquisitions and/or mergers, a strategic way to position themselves more strongly in this market.
Acquisitions in the market for personal care ingredients:
• In 2011, Ashland acquired International Specialty Products Inc. (ISP), expanding the toiletries portfolio, with emphasis on the functional ingredients. With this acquisition, Ashland also incorporated the French company Vinscience, specialists in biotechnology for the extraction of bioactive ingredients for skincare and hair care.
• BASF has made three important acquisitions that have consolidated it in the Brazilian specialties market: Ciba (2009), which strengthened the product portfolio; Cognis Holding Luxembourg (2010), one of the leading suppliers of specialty chemicals targeted at consumer goods, and Laboratoires Sérobiologiques, which has important innovations in cosmetology.
• In 1997 Croda acquired Sederma of France, a world leader in the supply of active ingredients for the cosmetics industry with a unique range of products for skincare and hair care. In 2006, Croda acquiredUniqema from ICI, establishing itself as a global leader in specialty chemicals. In 2012 Croda announced its acquisition of IRB (Istituto di Ricerche SpA Biotecnologiche), a world leader in the emerging market of plant cell culture.
• In 2003 DSM acquired Roche Vitamins & Fine Chemicals, widening its aim of investing in the Life Science segment.
• Symrise has strengthened its position in the global market with several strategic acquisitions since 2006. The three latest acquisitions were Manheimer Fragrances and Intercontinental Fragrances(2009), which substantially strengthened the Air Care segment; Futura Labs (2009), one of the leading manufacturers of scents and fragrances in Egypt and the United Arab Emirates, and Belmay (2013), an American fragrance manufacturer.
• Ionquimica became known as Agia in 2014, underlining the company’s new step in having differentiated integration and growth strategies.
According to Kline & Factor, Brazil still underinvests in innovation in the area of raw materials relative to other countries, when analyzing the past few years and launches made. However, according to the agency, the search for innovative solutions is becoming seen more and more in the routine business of cosmetics.
The study results will be presented at the 27th Brazilian Congress of Cosmetology, giving an overview of the overall performance of the ingredients market in Brazil, focusing on trends and the main categories of ingredients.
Sueli Ortega is the Publisher of the bilingual website CosmeticosBr