January 26, 2009

Volume 87, Number 4

Web Exclusive

THE ECONOMY

Cleaning Products Are A Port In A Storm For Chemical Makers

Michael McCoy

Although chemical companies that supply the cleaning product industry are devoting much of their creative energy to developing new products for environmentally conscious consumers, they do have another issue to contend with: The global economy is in a freefall, and there are no signs of recovery.

Lucky for such suppliers, they serve a relatively recession-proof market. "You can postpone buying a new car, but you continue to wash your clothes," points out Reinhold Brand, president of Evonik Industries' Goldschmidt Chemical subsidiary, a leading supplier of fabric softener actives and other cleaning ingredients.

John Cate, global business director for fabric and cleaning applications at AkzoNobel Surface Chemistry, says the recession has yet to have a negative impact on his company's business. "Early indications suggest consumers who would typically buy a premium brand may now be choosing value brands," he says. "This will affect how and where our products are used, but overall volume is likely to be stable."

Pascal Juery, president of Rhodia's Novecare home and personal care products business, says he continues to be bullish on the cleaning product market. In fact, Rhodia recently agreed to acquire the specialty surfactants maker McIntyre Group (C&EN, Jan. 19, page 30). With 2008 sales of about $146 million, McIntyre has been experiencing double-digit sales growth over the past three years, Rhodia says.

Of course, not everything is hunky-dory. Evonik's Brand notes that financially squeezed consumers might stop overfilling the detergent measuring cap or might start cutting back on the use of fabric softener.

And Evonik's customers are using falling prices for oil and some other commodities as an excuse to ask for similar reductions in the prices they pay for cleaning ingredients. Brand tries to explain to them that Evonik buys its feedstocks under long-term-contract prices that don't fall as quickly.

Carlos Silva Lopes, global marketing director for Dow Chemical's fabric and surface care business, says he spends a lot of his time talking to customers about the availability of key cleaning product ingredients. When big companies announce plant idlings or shutdowns because of the poor economy, customers get worried about the security of supply, he acknowledges. He assures them that Dow is doing whatever it can to avoid supply disruption.

Although Dow is responding to the recession with cost cutting across the company, Lopes says his business continues to spend on sustainability-related research. "I've not heard any customer that has lost sight of the key drivers of sustainability and energy savings," he says. "So we've prioritized our investment dollars on products that advance sustainability."

Chemical & Engineering News

ISSN 0009-2347

Copyright © 2009 American Chemical Society

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