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A Clean Break

Home care ingredients industry regains its stride after the recession

by Michael McCoy
February 7, 2011 | A version of this story appeared in Volume 89, Issue 6

Credit: Shutterstock
The view ahead is getting better for makers of cleaning chemicals.
Credit: Shutterstock
The view ahead is getting better for makers of cleaning chemicals.

For chemical companies that serve the cleaning products industry, the world’s return to economic health after a bruising recession has brought with it two other welcome developments: a re-embrace by consumers of premium brands and a rededication by customers to new product innovations—particularly ones that emphasize sustainability.

These developments, plus the effects of industry consolidation, were on display on the first day of the American Cleaning Institute’s annual meeting and convention, held late last month in Orlando. There, Henkel’s laundry and home care business gave Dow Chemical its Best Innovation Contributor 2010 award for a special polymer that helps restore fiber elasticity in clothing during washing.

Henkel has incorporated the Dow polymer, a hydroxyethyl cellulose derivative, into some versions of its high-end Perwoll line of detergents for delicate fabrics. “This innovative chemistry contributes to ensuring Henkel’s leading position in special laundry care,” Thomas Müller-Kirschbaum, senior vice president for R&D, technology, and supply chain with the Henkel business, said at an awards event.

For Eunice Heath, general manager of Dow’s home and personal care business, the new product is also an example of the innovations that will be coming from her group now that it has fully combined the research skills of Dow and Rohm and Haas. Although the polymer was under development at Dow prior to its acquisition of Rohm and Haas, she said the latter’s formulation expertise helped speed it to market.

Gabriel Tanbourgi is another executive counting on merger-related synergies for the home care market. Tanbourgi is head of care chemicals at BASF, which recently completed its acquisition of Cognis. The purchase was driven primarily by BASF’s desire to become a leader in the personal care business, Tanbourgi said, but Cognis’ strength in oleochemicals-based surfactants bolsters BASF’s offering to the cleaning products industry as well.

The ACI meeting was the fourth for Tanbourgi. In 2008, he recalled, the mood was excellent. Uncertainty reigned in 2009, followed by cautious optimism in 2010. This time, he said, “the focus on innovation is back—especially sustainability, which is a pillar of our strategy.”

Although the Cognis acquisition brought BASF ingredients based on renewable raw materials, Tanbourgi insists that sustainability involves much more than that. “It doesn’t make sense to take an ingredient and drive it around the world just to say you have a renewable in your product,” he said. “You have to look at the whole life cycle, which we do by ecoefficiency analysis.”

Executives at AkzoNobel have a similarly nuanced view of sustainability. The firm’s 2015 goal is for 30% of its products to be “eco-premium,” meaning they are significantly better than current products in at least one of six criteria—toxicity, energy efficiency, use of natural resources, emissions, land use, and risk—and not worse in any.

In 2009, AkzoNobel considered 20% of its products to be eco-premium. John Cate, global director of the company’s fabric and cleaning segment, said his business is ahead of the curve, with fully 65% of its products qualifying for eco-premium status.

Some, such as Akzo’s Dissolvine GL chelating agent, are derived from renewable raw materials. Others are touted as environmentally superior alternatives to existing products. For example, Cate said, the recently introduced Berol 609 alcohol ethoxylate surfactant is a drop-in replacement for common nonylphenol ethoxylates, which the Environmental Protection Agency is trying to usher out of the market.

Cate is among the home care ingredient executives who are optimistic about the year ahead. He expects a recovery for high-end cleaning products that might have been ignored by consumers during the recession. “I think downtrading to low- and midtier products has run its course,” he said.

Reinhold Brand, president of Evonik Industries’ Evonik Goldschmidt unit, hopes that is the case, because such products contain more of the ingredients his firm makes. During the recession, he saw too many drops in sales because product formulators skimped on ingredients to keep prices low for frugal North American consumers.

As the economy slowly revives, Evonik is grappling with another issue: rising raw material prices. The main raw material for the cationic surfactants that Evonik manufactures is beef tallow. Tallow prices have increased 50–60% in the past three months alone, Brand reports.

Likewise, Tom Nelson, a director at Procter & Gamble Chemicals, said prices for the tropical oils his firm relies on to produce oleochemicals have jumped to record highs. The reasons for these increases are numerous, executives said, and include crop shortfalls, diversion into biodiesel markets, and increasing buying power in the developing world.

Still, Brand would rather have raw material problems on his hands than a full-blown economic crisis. “In 2010, we had a good year compared to the crisis before,” Brand said, voicing an opinion held by others in the industry. “We’re hoping in 2011 that business comes back up to 2008 levels.”



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