Performance - BASF Personal Care is part of BASF's Care Chemicals division and a leading supplier of high performance ingredients for the personal care industry. The business unit was established in 2011 following BASF's acquisition of Cognis a year earlier.

CHEManager Europe asked the management of BASF Personal Care Europe for a review of the integration phase and also a business preview into the next year. Jan-Peter Sander, Senior Vice President of BASF's business unit Personal Care Europe and Dr. Thomas Schröder, Vice President Business Manager, provide the answers.

CHEManager Europe: The last two years have been an eventful time for BASF's Personal Care business. You have had to deal with both an integration phase and setting up a new unit. What were the major challenges posed by this? How did the different company cultures match and what did you do to "get the best of both worlds"?

Jan-Peter Sander: The best of both worlds perfectly describes the integration of the former Cognis businesses into BASF. Even though I joined BASF Personal Care Europe only some months ago, I can conclude that it is an excellent match and the cultures and skills of the two companies complement each other very well. After the acquisition, the core competencies were analyzed and a rich and diverse pool of resources and expertise, both in terms of scientific knowledge and consumer understanding, was discovered. What I can say about Personal Care is that the business successfully managed to draw on the combined strengths and leveraged the joint skills.

But of course, in the beginning, every change brings with it challenges such as an organizational set-up and the defining of an infrastructure and business model. Thanks to the huge effort made by the whole team, great progress was made and a challenging period was faced successfully. All of the employees showed great commitment and played a key role in making the integration a success by living a culture of diversity and bringing creativity to our innovation process - a key factor when it comes to meeting current and future market demands.

What was/is your strategy to harmonize the different brand structures and to communicate the changes to your customers? And how far has the unit got today?

Jan-Peter Sander: The new Personal Care business is the leading supplier of high-performance ingredients for the personal care industry. This is a position we managed to achieve thanks to the joint market expertise, technical and formulation skills and a combined product portfolio. In terms of our brands, the different brand architectures complemented each other very well and there was no need to change them.

However, we did launch a new umbrella brand, Care Creations, and a new communication concept, Inspired by Life. The brand and the concept apply to all BASF activities towards the personal care industry, including the cosmetic active ingredients business. This represents a major milestone in our commitment to always having a finger on the pulse of consumer and market needs, and expressing our business approach. The brand and the concept also clearly indicate our strengths. From an internal perspective, being inspired by life represents who we are. It is a roadmap that guides our everyday activities - from innovation processes to developing products and concepts that shape the market.

Thomas Schröder: Our first step was to invite our customers to join us in looking at life from a broader perspective by seeing things from a bird's eye view. The next step involves digging a little deeper, by taking an even closer look at people's needs, as though we are face-to-face with them. We analyze, for example, market research data to develop new consumer-focused innovations. This whole process involves global communication activities, with a noticeable presence in industry publications and relevant media.

What are the particular strengths of your business unit?

Jan-Peter Sander: In addition to a broad range of high-performance products, which is in fact, one of the most comprehensive portfolios available for personal care applications, our customers also benefit from our commitment to innovation, technological excellence and formulation expertise adapted to local markets, as well as our global reach as we have production and development sites and sales and marketing offices all over the world. Our approach is a synthesis of our key strengths market empathy and scientific excellence, which does not only add value but also makes BASF Personal Care a valued partner

Mr. Sander, before being appointed Senior Vice President at BASF Personal Care you held the equivalent position at BASF Pigments and Resins Europe. How do you aim to position BASF's European Personal Care unit? Will the personnel change also bring about a change in strategy?

Jan-Peter Sander: No. In fact I'm looking forward to building on the excellent work that has been done so far to drive the unit's strategy forward. We aim to support our customers by providing outstanding expertise, taking a pioneering approach and drawing inspiration from people's lives, thereby helping our customers and their offers to take on a more relevant role in consumers' lives. We will continue the successful implementation of this strategy.

In terms of personal-care solutions, different cultures have different requirements and require a personalized approach in terms of customized products for regional markets. How do you handle these differences from the R&D stage all the way through to marketing the new products?

Thomas Schröder: Innovation is one of our strategic priorities, because many of our customers are brand owners. They need to anticipate new trends and differentiate themselves in the market. We aim to support them by continually enhancing our portfolio and bringing solutions to market quickly. Imagine a cycle with the consumer as the starting point. We closely monitor the market in order to identify both new regional demands and overarching global demands, and also to anticipate current and upcoming trends. The next step is to take our understanding of the consumer needs we have identified, and translate them into solutions that are of real value for our customers and for us.

New technologies and methods play a key role here, and are also important when it comes to taking product inventions to the next level and developing new application concepts. Let's take the trend for products especially for sensitive skin as an example. People with sensitive skin show a heightened sensitivity to topically applied substances and environmental factors, and so are looking for products that are soothing and offer a pleasant sensory profile. But developing solutions like this can present considerable challenges, partly because it is difficult to predict sensorial responses and to find the right combination of ingredients, which makes formulating tricky.

New emulsion technologies could be, for instance, a key to developing an innovative care product for sensitive skin. This overall approach requires constant investment in research and development, including regional application labs and new consumer-focused, science-based methods of innovation. The BASF Verbund system provides us with even more opportunities to take approaches such as the one outlined. This means we can utilize resources to push successful innovations forward, and invest more time and resources in long-term innovations. We have an integrated network that we can rely on along the whole supply chain, from the initial stage through to the final, marketed product.

What have been the major trends in the personal care market in 2012?

Thomas Schröder: The personal care market is currently being driven by a variety of social aspects. Demographic change, individualization and the growing number of multicultural societies are key drivers that have led to the creation of some very specific product categories. In addition to this, a growing awareness of health, safety and sustainability factors have penetrated every aspect of daily life. Overall, consumers have a very wide range of needs, depending on their lifestyle and attitudes, and this has led to a greater segmentation of the market. Key examples here are products that can be adapted to specific needs and targeted to different age groups or stages of life. I've already mentioned the specific demand for products that are suitable for sensitive skin. There is also a growing demand for everyday UV protection, and this has resulted in a significant increase of UV filters being integrated into cosmetics that are used on a daily basis.

Another major trend is the evolution of anti-aging solutions that no longer focus solely on preventing wrinkles, but also target a multitude of signs of aging, aiming to improve firmness, radiance, suppleness and skin texture. They are based on highly technical formulations that work at a cellular level and promise to deliver fast, visible results.

In which market segments and regions do you see or expect to see above-average growth?

Jan-Peter Sander: Responding to trends and detecting them at an early stage is key to increasing market share. We aim to continue doing this in the future, by being a value-adding partner for our customers and allowing them to concentrate their efforts on research and production. This way, they can leverage growth opportunities by rapidly launching specially tailored products that meet emerging consumer needs at both a regional and global level. For instance, Asia and Latin America as well as Africa and Middle East are potential growth markets with a high demand for a variety of personal care applications. Body care, color cosmetics, sun care and hair care are focus segments, as the demand for high-performance products is likely to grow in these markets.

Thanks to our strategy and our market approach, I would say that BASF's Personal Care business is very well positioned to help our customers follow and set new trends while also meeting challenging consumer needs. In 2013, we will continue to invest in innovations and roll out the next phase of our Care Creations brand. Customers can also expect new products, concepts and formulations helping them to target the real needs of every day consumers, which in the end means business growth for all of us.