THOMAS SUL & NATALE CAPRI, CO-HEADS, PERFORMANCE MATERIALS,

DKSH

"Going forward, we see plenty of M&A opportunities in Southeast Asia and other regions of the world, and we have a set-up that allows us to tap into potential growth opportunities in these markets."

Could you briefly introduce DKSH? How important is Asia for the business?

N.C.: DKSH has over 150 years of business in Asia, delivering growth across our four Business Units: Healthcare, Consumer goods, Technology, and Performance Materials. Though we are a Swiss company listed on the SIX Swiss Exchange, our roots are in Asia, as the oldest Swiss company with uninterrupted business in Japan, where we were founded. Our tagline, “Delivering growth – in Asia and beyond,” reflects that Asia is our strongest focus; 96% of our business is Asian, and we are market leaders in pure-play specialty chemicals in the continent. DKSH is the first choice for clients seeking high-quality and value-added services such as sourcing, formulation, distribution, logistics, e-commerce, regulatory and after-sales services. Globally, we operate in 36 markets with 32,450 specialists. In 2020, we recorded net sales of CHF 10.7 billion.

Could you share more details about the Performance Materials unit?

T.S.: The Performance Materials unit serves customers in the food and beverage, pharmaceutical, personal care, and specialty chemicals industries. We provide innovative formulations, materials sourcing, as well as regulatory, sales, and marketing expertise. Our 1,260 people work in 120 locations, across 32 markets, within the unit. About half of our employees are science and technology professionals. The Performance Materials unit represents 10% of the DKSH’s turnover, with CHF 1.1 billion net sales in 2020. 65% of the business is in life sciences, including food and beverage, personal care, and pharma, while the remaining 35% is driven by specialty chemicals, each business line growing above the industry average.

Could you give us a retrospect of the Unit’s performance in 2020 and what is your outlook for 2021?

N.C: In 2020, our net sales were up 15% compared to the previous financial year, and our EBIT was up 7% at constant exchange rates. Very importantly, we made no staff cutbacks during this time. Last year, we also secured new distribution agreements in India, Korea, Vietnam and Europe, with players such as SABIC, Eastman, and Elementis. For 2021, we continue to focus on business development, digital marketing activities, and value-added services.

Would you like to comment on the recent acquisition of Axieo? How important is M&A to DKSH’s growth?

T.S.: Over the last years, DKSH Performance Materials has accelerated its M&A activity to build a pipeline of acquisition targets that can complement our existing business. The acquisition of specialty chemicals distributor Axieo in Australia and New Zealand has strengthened our reach in these countries. Going forward, we see plenty of M&A opportunities in Southeast Asia and other regions of the world, and we have a set-up that allows us to tap into potential growth opportunities in these markets.

How is DKSH employing innovation and local expertise to stay ahead of the competition?

N.C.: DKSH has one of the largest global networks of innovation centers for specialty chemicals and ingredients. Over the last decade, we have doubled this network and we have today 48 specialized innovation centers that develop new formulations and help to speed up time-to-market for our customers’ products. Secondly, an important constituent of our value-added services is our regulatory expertise, supported by 90 global professionals who understand specific legal frameworks for food safety or chemical handling regulations around the world.

How is DKSH using digitalization to advance its business?

T.S.: In the distribution space, digitalization is not replacing the traditional business anytime soon. Selling specialties requires deep technical understanding and formulation support. However, online platforms create more customer engagement touchpoints, enabling digital services like formulation guidelines, technical support, or regulatory registrations.

What are your priorities moving forward?

N.C.: Our main priority remains to capitalize on our legacy as the leading specialty chemicals distributor in Asia Pacific and grow both organically and inorganically, also outside of the region. We have also taken crucial steps to become more sustainable; recently in the Philippines we fully switched to renewable energy sources. DKSH incentivizes sustainability at a corporate level, with the entire Executive Committee having sustainability targets embedded in their variable compensation.