THE NATURE OF OUR BUSINESS – STABLE GROWTH - Symrise

half of 2009. After integration costs are taken into account, the acquisitions
did not benefit EBITA and, after recipe amortisation is
taken into account, EBIT was reduced by € 1.5 million. Further integration
costs of about € 3 million are anticipated in the first half
of 2009, but Group EBITA will be enhanced in 2009.
Also in the US, in July we acquired for $ 2.3 million (€ 2 million) a
20 % stake in the US biotechnology company, Therapeutic Peptides
Inc. (TPI) for an immaterial consideration. This secures exclusive
distribution rights for highly advanced cosmetic active
ingredients for Symrise and will further strengthen the Life Essentials
business within the Scent & Care Division.
On April 1, 2008, Symrise and the Italian biotech company Cutech
Srl. founded the cooperation project SCoutech. SCoutech offers
customers from the cosmetics, pharmaceutical and food supplement
sectors comprehensive testing methods for skin and hair
care substances and end products. We jointly developed a whole
skin model based on ex vivo pigskin that represents a highly innovative
alternative to artificial skin models and animal experiments.
Regulatory Environment
Symrise products are found in a number of application areas, including
food processing, cosmetic and pharmaceutical end products,
and household products. Worldwide use of our products
requires that we observe national and internationally valid consumer
regulations.
These regulations are in constant flux due to ever-new knowledge
in research, development and production technology, due to a
growing need for safety, and due to steadily increasing health and
environmental awareness worldwide. We therefore observe the regional
and global development of these processes very carefully.
This ensures that we can react quickly to changes in or the tightening
of regulations and avoid negative effects on production costs
or our product portfolio.
At present, the regulatory activities of the Scent & Care division are
focusing on the European Union (EU). In December 2006, the EU
established REACH (Registration, Evaluation, Authorisation and restriction
of Chemicals), laying the foundations for comprehensive
re-regulation of the use of chemical substances. Under REACH,
the companies that produce the substances bear greater responsibility
for their safe use.
Symrise successfully completed the first phase (pre-registration)
of REACH. We pre-registered more than 1,400 substances through
different legal entities and exclusive representatives, putting in
Annual Report 2008 Symrise AG 67
place the prerequisites for manufacturing or importing the substances
until the final registration dossier is drawn up (by 2018,
depending on the substance). We are continually preparing for the
next steps. We are involved in various SIEF (Substance Information)
and industrial consortia, and are preparing the registrations
for the dossiers planned for 2010 and 2013. In addition, we are
also preparing to introduce the Globally Harmonized System of
Classification and Labelling of Chemicals (GHS).
The Flavor & Nutrition division’s products are primarily used in
foods (savory and sweet foods as well as dairy products), beverages
(soft drinks, beverages containing alcohol, and alcoholic
drinks), and pharmaceutical applications. The legal regulations for
flavors vary in the different legal jurisdictions, particularly in the
European Union and the United States. Depending on the jurisdiction,
different maximum amounts of certain ingredients are permitted
and special labeling regulations may apply.
Symrise utilizes company-wide data processing systems and its
comprehensive expertise in food law to ensure that our products
are legally marketable in the relevant markets. Since more and
more customers are using Symrise’s flavors in all kinds of markets,
the global aspect is becoming significantly more important.
Thanks to our expertise in the regulatory environment, we can actively
support these customers in the roll-out of their products in
new markets.
2008 witnessed a number of changes in legal regulations, particularly
in the European Union. Due to the passing of new EU laws
governing the approval of food additives, flavors, and enzymes, the
legal environment for these EU industries will change in the years
to come. Symrise has followed the legislation process via its activities
in different industry associations and is therefore well prepared
for change. Consequently, we do not expect legislation to
have negative effects on the costs of our products or our product
portfolio.
Group Management
Report