UPDATED: Croda’s policy in America reaps rewards

Steve Foots of Croda
Steve Foots of Croda
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CRODA International, the speciality chemical company, said action to restore growth in North America was boosting its performance across all sectors.

Snaith-based Croda makes high performance ingredients and technologies for some of the biggest brands in the world.

The company creates, makes and sells speciality chemicals that are relied on by industries and consumers around the world.

In a trading update, Croda said it had continued to achieve organic growth, with core business constant currency sales up 5.7 per cent.

Earlier this year, Croda displayed its commitment to Yorkshire by announcing a £27m investment into its Hull plant, which will double capacity at the site. It now employs around 700 people in Yorkshire.

The statement to accompany the trading update for the third quarter, said: “The improved sales trend seen in the first half of 2017 continued through Q3 (third quarter) with group constant currency sales up 4.4 per cent in the quarter and 4.0 per cent year to date.”

In reported currency, Q3 group sales grew 6.1 per cent to £334.6m, including a 1.7 per cent benefit from currency translation.

The statement added: “Year to date sales were 12.8 per cent higher, including a currency translation benefit of 8.8 per cent. Q3 profit margin increased slightly over prior year, reflecting improved product mix and pricing, with a successful focus on growing value ahead of volume.”

The statement continued: “In the core business – measured in constant currency – action taken to restore growth to North America continued to benefit performance across all sectors, with sales up 8 per cent in the quarter.

“Asia maintained its strong momentum, growing sales by 6 per cent, reflecting the benefits of increased proximity to local and regional customers following the transfer of distributor sales to our direct selling model.”

Sales in Europe grew by 7 per cent, benefiting from robust demand in personal care, Croda said.

The statement added: “Macro-economic conditions in Latin America remained challenging, with sales 2 per cent lower, although there are some signs of improvement emerging.”

Croda said that strengthening personal care sales were driven by growth in all regions and there had been steady progress in life sciences.

Croda also said that its balance sheet remains robust.

Commenting on the trading update, Steve Foots, the chief executive, said: “We continue successfully to deliver on our priorities for 2017 – driving profitability through premium, faster growth market niches; improving performance in less differentiated markets; and making progress towards our target increases in return on sales in life sciences and performance technologies.”

Mr Foots added: “The combination of good top line growth and margin in Q3 gives us confidence in delivering our expectations for the full year.”

CRODA International was founded in Rawcliffe Bridge in 1925 by Mr Crowe and Mr Dawe to make lanolin from wool grease, a natural byproduct of the wool industry.

More than 90 years later, virtually every cosmetic and toiletry company in the world uses Croda’s products.

During the Second World War, Croda did its bit for the Allies by collaborating with the Government to produce chemicals such as camouflage creams, insect repellent and gun cleaning oils. It continued to grow in peacetime.

In 2006, Croda acquired Uniqema from ICI to cement its place as a global leader in natural chemicals.