Products
Enhanced analytical marketing in adverse international evolutions.
In the business unit “products”, the international background became significantly harsher. It increased the pressure on the margins of this activity across company activities as a whole.
The well-known factors dominated the room to move for numerous companies operating on international markets from within Europe. Even with satisfactory volumes sold, the contribution to the return is no longer in line with previous years. Substantially increased raw materials costs (such as oil products and some organic chemicals) played an important part in that in 2007. For obvious reasons, the persisting weakening of the dollar led to a smaller net return compared with earlier agreed sales prices. Meanwhile, competitors from “dollar countries” (such as the USA and Canada, China, India) have been able to benefit even more from this monetary situation. This is an important factor for markets such as the USA that represent 18 % of product sales (please refer to chart).
Product volumes per geographical zone
React appropriately offensively
This adverse international context creates a number of challenges for companies such as Proviron, which can often be answered by appropriate goal oriented reactions. By enhanced analytical marketing, we were able to understand better our markets and their pricing mechanisms, thus seizing local opportunities even more effectively.
Consequently, Proviron has made additional efforts within its own structure to evaluate optimally customers’ problems and requirements. For that reason, a scientist is employed full time looking after technical customer support. In India, we have identified our own agent whilst in China, this is under negotiation.
Moreover, we are very much thinking along with existing customers. This creates market opportunities for new or altered products. In our continuous concern to renew or expand our product portfolio, we consider new opportunities at our customers a driving force.
Exiting range of niche products
The existing own products portfolio holds several speciality chemicals in quantities of 100 to 5000 tonnes. In this high added value range we are market leader for several products. Examples are deicers for airport runways and roads, intermediates for the pharmaceutical, paper and automotive industries; additives and plasticisers for the production of synthetic materials, surfactants, and several other fine chemicals.
The REACH challenge
(Registration, Evaluation and Authorisation of Chemicals)
European legislation about the safety and environmental friendliness of chemicals is being rolled out step-by-step. Proviron has continued to prepare for this by intense communication and information both internally as well as vis-à-vis customers. REACH offers opportunities both upstream and downstream in the product chain. New applications of known products will emerge and create new opportunities. These will be fed back to Proviron’s R&D department. There will also be shifts of producers, especially when small quantities are concerned. Moreover, a competitive vulnerability exists in cases of imports from non-European areas through a system of “only representatives” who can centralise necessary procedures for a great number of external providers and thus lower costs for them.