Henkel

Henkel AG & Company, KGaA

Type	Kommanditgesellschaft auf Aktien with Aktiengesellschaft as partner with unlimited liability
Traded as	FWB: HEN, HEN3
Industry	Consumer goods, industrial goods
Founded	1876 (1876)
Headquarters	Düsseldorf, Germany
Key people	Hans Van Bylen (CEO and Chairman of the executive board), Simone Bagel-Trah (Chairwoman of the Shareholders’ Committee & Supervisory Board)
Products	laundry and cleaning products, beauty care, adhesives and sealants
Revenue	€18.089 billion(2015)[1]
Operating income	€1.921 billion (2015)[1]
Profit	€2.645 billion (2015)[1]
Total assets	$24.71 billion (2016)[2]
Number of employees	49,450 (average, 2015)[1]
Subsidiaries	Henkel Corporation The Sun Products Corporation
Website	www.henkel.com

Henkel AG & Company, KGaA, headquartered in Düsseldorf, Germany, is a multinational company active both in the consumer and industrial sector. Founded in 1876, the DAX 30 company is organized into three globally operating business units (laundry & home care, beauty care, adhesive technologies) and is known for brands such as Persil and Fa amongst others.

In the fiscal year 2015, Henkel reported sales of 18.1 billion euros and an operating profit of 2.9 billion euros. More than 80 percent of its about 50,000 employees work outside of Germany.^[3]

Business Areas

The Henkel company operates in three business areas:

• Laundry & Home Care with household cleaning products such as laundry detergent and dishwashing liquid,
• Beauty Care with beauty and oral care products such as shampoo, toothpaste, hair colorants and shower products, and
• Adhesive Technologies with adhesives, sealants and surface treatments for consumer and industrial purposes.

Brands

Vintage Persil advertising in Wismar

Laundry & Home Care

Henkel's most famous brand is Persil, introduced in 1907, the first commercial "self-activated" laundry detergent, which means a bubbles forming bleach (sodium perborate) with a soap component (silicate). The abbreviation of the names of the two main components perborate and silicate compose the product name.

Other laundry & home care brands include Purex washing powder, Vernel/Silan fabric softener, Somat/Glist dishwasher tablets and Pril washing-up liquid.

Persil Abaya Shampoo or Persil Black is a liquid detergent that Henkel introduced to the Saudi Arabian market in 2007 and later to other Gulf Cooperation Council region markets. The company sells the liquid as a specialist detergent for abayas, the loose, traditionally black, robe-like garments worn by women in many Islamic cultures.

On June 24, 2016, Henkel Consumer Goods Inc., a subsidiary of Henkel AG & Co. KGaA (“Henkel”), has signed a definitive agreement to acquire The Sun Products Corporation (“Sun Products”), a Vestar Capital Partners V portfolio company. The transaction is valued at $3.6 billion. Sun Products, based in Connecticut, has a portfolio of iconic laundry and household brands, such as all®, Sun®, Wisk®, Snuggle® and Sunlight®. The company also develops and manufactures laundry and dish care brands for leading retailers in North America. In fiscal 2015, the company generated sales of approximately $1.6 billion in the US and Canada. Sun Products employs approximately 2,000 people.°^[4]

Beauty Care

Schwarzkopf haircare, Schauma shampoo, Fa shower gel and deodorant, Diadermine skin and body care, Dial shower and hand soap.

The cosmetics company Hans Schwarzkopf GmbH was acquired by Henkel in 1995^[5][6]

Adhesive Technologies

Loctite and LePage as well as UniBond adhesives and sealants, Pritt glue sticks, Polyseamseal caulk, and Plastic Padding chemicals.^[7]

History

The company was founded in 1876 in Aachen as Henkel & Cie^[8] by Fritz Henkel (a 28-year-old merchant who was interested in science) and two more partners. They marketed his first product, "Universalwaschmittel", a universal detergent based on silicate.

In 1878, to take advantage of the better transport links and sales opportunities, Henkel relocated his company to Düsseldorf on the Rhine (its present site). Düsseldorf was the gateway to the Ruhr region, which became the most important industrial area of the German Empire from the 19th century onward. That year, the first German brand-name detergent appeared: Henkel's Bleich-Soda [Bleaching Soda], an affordably-priced product supplied in sturdy paper bags. Made from water-glass and soda, it was the result of Fritz Henkel's own research. The soda was obtained from Matthes & Weber in Duisburg (Henkel bought this company in 1917 and sold it in 1994).

In 1879, Fritz Henkel was entered as the sole owner in the register of companies. Sales of Henkel's Bleaching Soda increased so rapidly that within just one year the rented factory on the Schützenstraße in Düsseldorf was unable to meet the demand. Fritz Henkel decided to build his own factory with a railway link.

In 1883, to improve liquidity and make better use of the company's travelling sales staff, Fritz Henkel decided to sell merchandise in addition to his detergents. Sales started in 1884. The range included the colorant ultramarine [laundry bluing agent], gloss starch, a liquid cleaning agent, a pomade for cleaning, beef extract, and a hair pomade. Very soon Henkel developed its international presence—in 1886, Henkel opened its first international sales office in Austria. Carl Pathe had gone to Vienna as a representative the year before. In 1893, Henkel established its first business links with England and Italy.

Henkel mural in Berlin, 1951

In 1903, Schwarzkopf founded by Hans Schwarzkopf (1874–1921) launched a powder shampoo. Persil came in 1907 as the first “self-acting laundry detergent”.

Henkel has been a family-run business since the beginning. In 1893, Fritz Henkel, Jr. (1875–1930) joined the firm as an apprentice. After receiving commercial training he became his father's right-hand man in commercial matters. He put Henkel's brand-name product business on a sound footing, developed its already successful advertising still further and was responsible for the company's field service. On July 25, 1904, he became a partner in Henkel, which was transformed into a general commercial partnership. By this time, 110 people were employed at the Holthausen site. On April 25, 1905, Dr. Hugo Henkel (1881–1952), the youngest son of Fritz Henkel, Sr., joined the company as a chemist. He was in charge of Chemical Products and Technology. Over the years, he laid the foundations of systematic research and introduced advanced technologies and new raw materials. In 1908, he became a personally liable partner in the company.

In 1912, total production in Düsseldorf-Holthausen rose to 49,890 tons. At 19,750 tons, Persil laundry detergent accounted for 40 percent of this, just five years after its market launch. The number of employees increased by 89 relative to the previous year, resulting in a total workforce of 1,024. Around half were female. A first-aid center was set up in the plant and a full-time nurse was employed. In the previous year Henkel had installed ball fields and play areas to encourage exercise during break times. Female employees could attend the plant's own housekeeping school during the lunch break.

On January 11, 1923, troops from France and Belgium occupied the Rhineland. The occupation made delivery of adhesives from suppliers used for the packaging of Persil unreliable. The disruption caused Henkel to internally manufacture adhesives for its own needs. Henkel found there was a demand for adhesives on the market, and on June 22, 1923, the first adhesive shipment left the plant.^[9]

During World War II, foreign civilian slavery workers and prisoners of war were working for the company. Henkel was part of a large-scale restitution settlement.

Henkel U.S. headquarters Scottsdale, Arizona

On April 16, 1945, American troops occupied Henkel's Düsseldorf site. On June 5, the British military command in Düsseldorf took over from the Americans. From July 20, the British military government gradually granted permission for the production of adhesives, P3 and water-glass by Henkel, and for soaps and detergents as well as shoe polish by Thompson. In February 1946, Matthes & Weber in Duisburg was given permission to process available raw materials into soda. On September 20, 1945, five members of the Henkel family and another seven members of the Management Board and the Supervisory Board were interned.

In 1949, the launch of Schauma shampoo by Schwarzkopf marked the start of the most successful German shampoos.

In 1954, Henkel-subsidiary Dreiring launched Fa soap, a new type of toilet soap. From 1970 onward it was joined by a series of Fa deodorants, shower gels and bubble baths, making Fa one of the best known umbrella brands in the toiletry sector.

Pritt, the world's first glue stick, made its debut in 1969. Over the years, other products were introduced under this brand, underlining Henkel's importance in the office and stationery supplies sector. Exports of Pritt began in the same year, eventually making this Henkel's most widespread global brand. Vernel fabric softener and enzyme-based bioactive Persil 70 appeared.

Starting in the 1960s, Henkel has combined organic growth with strategic company acquisitions:

• In 1960, by acquiring Standard Chemical Products, Inc. (known as Henkel Inc from 1971), Henkel entered the U.S. chemical products market.
• In 1962, Henkel acquired Sichel-Werke AG, Hannover, its main German competitor in the adhesives sector.
• In 1974, Henkel acquired shares in The Clorox Company, USA, to facilitate the production and sale of certain products developed by Henkel for household and bulk consumers (sold in 2004).
• In 1983, Henkel acquired the AOK facial care range from the company von Heyden GmbH and thus strengthened its position in the cosmetics retail trade.
• In 1984, Teroson of Heidelberg (in existence since 1898) was acquired and integrated into Henkel's Adhesives and Surface Technologies business sectors.
• Cosmetics company Hans Schwarzkopf GmbH was acquired by Henkel in 1995
• In 1996 Henkel acquired Thiem Automotive, a division of National Starch and Chemical Company. The acquisition included a manufacturing plant in Oak Creek, Wisconsin.^[10]
• Later it purchased Loctite in 1997.
• The purchase of The Dial Corporation in 2004 was the biggest acquisition in the history of the company until then: This renowned U.S. personal care and household cleaning products company gave Henkel a strong foothold on the North American market.
• In 2004, Henkel also acquired the American cosmetics company Advanced Research Laboratories (ARL), that has developed and marketed hair cosmetics.
• Also in 2004, Henkel acquired Orbseal.^[11] The former Orbseal plant in Richmond, MO was converted to a Henkel plant.^[12]
• In April 2008, Henkel took over from AkzoNobel the Adhesives and Electronic Materials businesses previously owned by National Starch. In 2007, these two business segments of National Starch generated sales of £1.25 billion (about €1.83 billion). The purchase price was £2.7 billion (about €3.7 billion).

On May 5, 2011, Jyothy Laboratories bought 50.97% stake in Henkel India. It has offered to buy 20% more in Henkel India through a compulsory open offer mandated by SEBI norms.^[13]

In 2008, Henkel KGaA became Henkel AG & Co. KGaA. That same year, Prof. Dr. Ulrich Lehner retired from his position as Chairman of the Management Board of Henkel KGaA. He was succeeded by Kasper Rorsted.^[14] In September 2009, Dr. Simone Bagel-Trah was elected as new Chairwoman by the Henkel Shareholders’ Committee as well as Henkel’s Supervisory Board.^[15] The retirement of Albrecht Woeste, who had been member of the Committee since 1976 and its president since 1990,^[16] marked the transition from the fourth generation of the Henkel family to the fifth.

In 2010, Henkel defined a new corporate vision: “A global leader in brands and technologies”. In order to implement them into the company’s working environment, the five values “customers”, “people”, “financial performance”, “sustainability” and “family” were discussed by all employees in around 5,000 workshops. In 2011, Henkel introduced its new corporate design combined with the launch of its new claim “Henkel – Excellence is our Passion”.^[17] I

In 2014, laundry products specialist Henkel offered to buy French-based laundry aids-to-shoe polish manufacturer Spotless for 940 million Euros (about $1.3 billion) in cash. “By acquiring Spotless, we will strengthen our market position and enter highly profitable growth segments,” Henkel chief executive at that time, Kasper Rorsted, told reporters.^[18] The deal would slightly increase Henkel's share of the $82 billion global laundry care market to 8.7%, still well behind Procter & Gamble's 26.6% and the 14.8% market share held by Unilever, which sells Persil detergent—a Henkel brand—in some markets.^[19] The takeover, which was subject to approval from antitrust authorities, was completed in May 2015.^[20] Effective May 1, 2016, Hans Van Bylen took over the position as Chairman of the Henkel Management Board.^[21] Also in 2016, Henkel acquired the laundry and home care company Sun Products for 3.2 billion euros ($3.6 billion), thus becoming No. 2 supplier in the North American laundry care market,^[22] and presented its new strategic priorities and financial ambition for 2020.^[23]

Sustainability

In its company history, Henkel emphasizes the importance of sustainable development. In 1958, for instance, Henkel’s research systematically studied washing active substances in surface waters, which led to the development of low-foam surfactants. Henkel was thus prepared for the German Detergents Act of 1961 passed in response to the mountains of foam on rivers and lakes. It permitted only readily biodegradable detergents to be used from 1964 onward. As early as 1992, Henkel published its first Environment Report.^[24] Henkel is also a founding member of the “World Business Council for Sustainable Development” (WBCSD).^[25] In 2003, Henkel declared its participation in the United Nations Global Compact and has committed itself to the Compact’s ten principles in the areas of human rights, labor, environment and anti-corruption.^[26] Since 2008, Henkel is an official member of the “Roundtable for Sustainable Palm Oil” (RSPO).^[27]

In 2008, the company announced its sustainability targets for 2012, which were met by the end of 2010: energy consumption had decreased by 21 percent, water usage by 26 percent, and the amount of waste generated by 24 percent. Over the same period, the number of occupational accidents fell by 29 percent.^[28] Presented in 2012, the goal of Henkel’s new Sustainability Strategy 2030 is to achieve more with less and to triple the efficiency. The strategy’s focal areas are divided into two dimensions: Under the headline “more value”, the company focuses on the areas “social progress”, “safety and health” and “performance”. The second dimension “reduced footprint” deals with “energy and climate”, “materials and waste” and “water and wastewater”.^[29] As a short-term goal until 2015, Henkel aims to achieve a 15 percent reduction per production unit in the focal areas energy, water and waste. At the same time, the company plans to reach a 10 percent increase in net external sales per production unit. Henkel also intends to reduce its incident rate by 20 percent.^[30]

Henkel has been listed in the Dow Jones Sustainability Index ever since it was established in 1999.^[31] In 2011, the company was named sustainability leader in the Nondurable Household Products sector for the fifth consecutive time.

Henkel has structured its corporate citizenship activities around three core elements: supporting employee volunteering (MIT Initiative), corporate and brand engagement for the common good and emergency aid. Since 1998, more than 4,000 Henkel employees and retirees have been involved in over 9,700 projects in more than 50 different countries.^[32]

In 2016, Standard Ethics Aei has given a rating to Henkel in order to include the company in its Standard Ethics German Index.^[33]

Social partnership

Henkel's Corporate and Brand Engagement programme is a social partnership supporting communities and social and public institutions around the world. Among those that benefit are sports clubs, hospitals, kindergartens, schools and universities, charity organizations and cultural events. Henkel supports long-term projects which meet social needs, promote education, health and culture and support the environment.

Henkel Innovation Challenge

In 2007, Henkel organized a students' innovative ideas competition.^[34] Teams of two should propose a product with the focus on sustainability, creativity and future perspective—to "foresee" the possible needs for year 2030 or 2050. The contest was focused on beauty products initially, but later was broadened to all three main branches of activity.

Competitors and anti-competitive practices

Henkel's main competitors in its cleaning division are Unilever, Procter & Gamble and Reckitt Benckiser. In its beauty division, its main competitors are Unilever, Procter and Gamble and L'Oréal. In its chemical and adhesive division, it has many competitors, but the main multinational competitors are Bostik and H. B. Fuller.

Henkel was fined by Autorité de la concurrence in France in 2016 for price-fixing on personal hygiene products.^[35]

See also

• Cognis

Notes

1. ^ In an agreement with Unilever, the Persil brand is only used by Henkel in mainland Europe (with the exception of France), while Unilever only uses the brand in the UK, Ireland, Oceania and other markets.

References

External links

Wikimedia Commons has media related to Henkel AG.

• Official website