Organizational restructuring at Cognis:
focus on market and customer orientation

Cognis optimizes its organizational structure: The five Strategic Business Units (SBUs) are now responsible for all business processes that directly affect their competitiveness and relationship with customers, including research & technology, manufacturing, and some aspects of purchasing and supply chain management. The aim of the changes is to ensure a more consistent market and customer orientation throughout the company.

The global specialty chemicals supplier conducted a thorough review of all its business processes and organizational structures, and the most important conclusions were that responsibility for research & technology, manufacturing, some aspects of purchasing and supply chain management, and the production sites should move to the Strategic Business Units. Under the new structure, Cognis’ five SBUs – Oleochemicals, Nutrition & Health, Care Chemicals, Functional Products und Process Chemicals – are now responsible for all processes that impact their turnover and profitability. Comments Cognis CEO Dr. Antonio Trius: “The SBUs are closer to our customers, and thus better placed to decide which activities contribute most to their success. For this reason, the changes will have a decisive effect on improving our market and customer orientation.”

Customer orientation will also be enhanced by integrating the Fatty Alcohols and Primary Surfactants businesses into the Care Chemicals SBU. This means that one business unit now provides all the base and specialty chemicals that are relevant to the cosmetics, detergent and cleaning industries, making it a leading supplier of raw materials to the personal and home care market, with sales of 1.1 billion euros in 2003.

At the same time as carrying out the reorganization, Cognis is also increasing its investment in new production facilities with the aim of expanding capacity and improving efficiency. In Germany, the investment will be targeted on the areas of Functional Food and Basic Oleochemicals. For example, new fatty acid splitting and distillation facilities have been installed at the Düsseldorf-Holthausen site, where a glycerin distillation facility is also under construction, and a new sterol ester production facility is being built at Illertissen. A new production facility for environmentally friendly refrigeration lubricants was commissioned in Brazil last month, and Cognis Thailand will soon have a new esterification reactor facility.

There has also been a change on Cognis’ Management Board, where on March 1 2004 Arnold Kiel (42) replaced Joachim Söhngen (57) as the company’s Chief Financial Officer. Mr Söhngen, who had held the position since the company became independent from Henkel, has now left the company. His successor was previously CEO and Chairman of Random House Germany.

About Cognis:
Cognis is a worldwide supplier of innovative specialty chemicals and nutritional ingredients. It employs 8,500 people, and has production sites and service centers in almost 30 countries. The company has dedicated its activities to a high level of sustainability and delivers natural source raw materials and ingredients for food, nutrition and healthcare markets, and the cosmetics, detergents and cleaners industries. Additionally, Cognis provides solutions for a number of other industries, such as coatings and inks, lubricants, textiles and plastics, as well as agriculture and mining.

Cognis is owned by private equity funds advised by Permira, GS Capital Partners, and Schroder Ventures Life Sciences. In 2003, Cognis recorded sales of 2.95 billion euros and an operating profit before depreciation, amortization and exceptional items (EBITDA recurring) of 312 million euros.

Contact:
Susanne Sengel, Corporate Communications Manager,
Cognis Deutschland GmbH & Co. KG
Phone: +49-211-7940-5431
e-mail: susanne.sengel@cognis.com
Internet: www.cognis.com

Wulf Klüppelholz, Corporate Communications Manager
Cognis Deutschland GmbH & Co. KG
Phone: +49-211-7940-6679
e-Mail: wulf.klueppelholz@cognis.com
Internet: www.cognis.com