Shanghai, Jakarta, Bucharest, Mexico City… Just a few examples of the 70 locations where Sensient Technologies have placed their footprint across the globe. This diverse, multifaceted company operates in over 30 countries with customers in more than 150. Sensient is now looking to further its presence across the world. When I speak to Kenneth Manning, Sensient´s Chairman and Chief Executive Officer, I am eager to find out how he has achieved so much when the rest of the world has been in the grip of an economic crisis, and what his ongoing strategy could be.
“I am happy to report excellent earnings per share for 2009. Our sales were strong at $1.2bn and our cash flow surpassed $138 million, the highest in the company’s history.
The economy may be struggling but we are not”, Mr Manning tells me. “The uniqueness of our products stood up to the tough market.” I ask him how he would characterise his company now in May 2010 and looking onwards. “High-tech, high growth and international,” he responds without hesitation.
Sensient´s technological strength is indisputable, with major investment projects across the globe, in particular in china and the US.
A new production plant for flavour extracts was opened in Indianapolis, as well as a major facility in Guangzhou, China, including labs and manufacturing equipment. A $16 million investment in natural colours in St. Louis was also just announced. About 60% of Sensient´s revenue now comes from overseas. “We’ve had some spectacular opportunities in China, with a larger operation base now running in Brazil. Growth has been strong across Eastern and Central Europe. We are continuing to pursue geographic expansion with our development of an extended distribution system. We have recently established nine new locations with sales and technical personnel in Helsinki, Warsaw, Bucharest and other cities in Eastern and Central Europe and Scandinavia,” said Mr Manning.
With so much of the planet already able to access Sensient´s products, I ask if there are any specific markets being targeted. “We are very interested in the Balkans, the Baltics and Ukraine and we are looking at North Africa. We are particularly interested in expanding in Central and Eastern Europe. Interestingly, these are often the countries with less disposable income, yet there we find greater demand for natural colours.”
Natural products were arguably 2009´s biggest trend. “Naturals are in fact now growing much faster than synthetics,” Manning comments. “Our new Fusion brand of natural colours can match specific shades with superior quality for our customers. We’re number one in the world for our food and beverage colours, and our food colour technology has become so advanced that It can be applied in non-food sectors, such as inkjet inks and cosmetics. The factories are differents, but the underlying technology is the same.”
2010 will see key new colour and flavour regulations introduced acroos the EU. “We are very well placed for the new legislation,” Manning says. “Natural colour and flavour trends across Europe have been leading the way, and are now forcing many US companies to go natural too.” He elaborates on other foods trends he expects to see in the future. “Value will be a key area for consumers. They want as good a solution as possible but for less money. I expect to see a continuation of private label – it´s an excellent way to offer a high quality product at a reasonable price. In the longer term, we will see many more new products. Manufacturers have remained with established brands, and in the last few years, because of the economy, we have not seen as many new product launches. Launches will accelerate as the economy picks up.”
Sensient offer innovative products which have relevance across cultures, a combination which generates growth. How does Mr. Manning manage this expanding global business? “We have a very flat organisation and follow a profit centre concept. Our general managers have a great deal of autonomy in their particular regions. We have strong financial controls and our financing is handled centrally. Locally, the general manager has control over sales and can adjust products and product mix to the preferences of the region.
Strategy is a crucial aspect of Sensient´s success. “Our ongoing aim is to launch new products. Health and wellness is a key area, and I plan to develop more natural products. Continuing to offer state-of-the-art technology is of utmost importance. We are currently expanding into additional geographic markets, and we are focusing on future global development.”
Looking at Sensient today, it’s hard to believe this billion-dollar global enterprise began in 1882 as Meadow Springs Distilling Company, making gin and later yeast. Before Mr Manning joined the company, it had become a collection of low-growth commodities businesses. When Mr Manning became CEO, he embarked on an acquisition programme to invest in new technologies and new markets. The company is now a leading global developer, manufacturer and marketer of colours, flavours and fragrances.
Mr Manning is confident about Sensient´s progress and its plans for the future. “I expect this year to be a very strong year for Sensient. We are well-positioned, whether or not the economy turns up.”
Source: Kennedys Confection