SHANGHAI - German detergent and glue maker Henkel plans to draw 45 percent of its global revenue from the emerging economies by 2012, up from the current 41 percent in 2010.
In fact, the Asia-Pacific region contributed 14 percent to the global sales in 2010, and almost 40 percent of the region's revenue came from China.
Henkel's growth was powered by a global economic revival last year and the German business group reported a year-on-year increase of 11.2 percent in sales totaling 15.09 billion euros ($20.83 billion).
The company, which specializes in laundry and home care, cosmetics, toiletries and adhesive technologies, manages leading brands such as Schwarzkopf, Loctite, Teroson, Pritt and Pattex.
"Our industrial business in particular was able to benefit considerably from the global economic recovery. The double-digit growth rate registered in the transport, mechanical engineering and electronics sectors had a positive influence on our business performance," said Henkel China President Faruk Arig.
Arig said 2010 was an excellent year for Henkel, because for the first time, the company closed the financial year with an adjusted earnings before interest and tax (EBIT) margin above 12 percent. "With these strong results, we are well on track to achieve our 2012 financial targets", he added.
Henkel China outperformed all market parameters in 2010, for its cosmetics and toiletries and adhesive technologies businesses. The company has maintained double-digit growth on average for the past two decades.
China has become one of the most important countries for Henkel. Total investments across the nation reached $530 million since 1988, when the company first entered China. Henkel now has 14 sites in 11 cities in the country.
"We will make new investments in Southwest China to get closer to our customers and support the government's 'Go West' policy as well as bring the most advanced technologies to China and foster the local research and development capacities," Arig said.
"In 2010, we also took a decision to construct a plant for our Adhesive Technologies business in Shanghai, which is destined to be our largest facility worldwide," he added.
The company is also committed to increase job opportunities in China and is planning to develop talent management programs, including trainings, job rotations, and competitive compensation plans.
"Looking at the future, the economic conditions remain challenging," Arig said, adding raw material shortages, price increases, as well as sustaining development and providing affordable products remain Henkel's major concerns.
Like many foreign-funded companies, which are under cost pressures, Henkel has been closely monitoring costs for the past two years. "That's why we have a strong cash flow from operations amounting to 1.8 billion euros, which enabled us to reduce the net debt further to 2.3 billion euros," said Ben Ho, chief financial officer of Asia-Pacific region.
