What Started Out as a One-man-show…

Interview with Christian Sommer, Managing Director
SLI Chemicals GmbH

Can you briefly introduce SLI Chemicals as a company?

SLI Chemicals GmbH was founded in 1997 in Frankfurt am Main by Mr. Stefan Stupp and this year celebrates its 25th anniversary. The business activities began as an independent sales company of Sharon Laboratories Israel, one of the world's leading manufacturers of preservatives for cosmetic applications. At an early stage, the product portfolio was continuously expanded to include further raw materials for customers in the life science and natural cosmetics sectors. From our two business units, Food & Animal Nutrition and Cosmetics, we supply our customers in Central Europe with specialty chemicals for the production of food, dietary supplements and pet food, cosmetics, and detergents and cleaning products. Our long-standing global supplier relationships build the basis for the best possible supply reliability, high product quality and application-related advice to our customers.

How has business developed in the recent past?

As for many companies in the chemical industry, the past few years have also been challenging for us. In the field of cosmetics, thanks to the acquisition of a new supplier and the continuous further development of the product portfolios of our long-standing suppliers, we have succeeded in substantially expanding our business. The picture is divided in the Food & Animal Nutrition segment. The portfolio is characterized by amino acids, phosphates and rheology additives, most of which have been manufactured in China and South-East Asia for many years. In particular, the ongoing effects of the CORONA pandemic and turbulence in the global logistic network require very precise procurement planning in order to maintain delivery security for our customers. High demand for pet food and convenience food combined with a tense supply situation has caused the prices for large parts of the portfolio to rise to levels that were unimaginable 18 months ago.

What is the strategy for the next few years?

The volatility of the business, especially with volume products, is not unproblematic with regard to continuous, sustainable and profitable growth. Our goal is therefore to continuously expand our portfolio in the area of specialty chemicals that require explanation. To support this strategy, we put our application technology laboratory for cosmetics into operation at the turn of the year 2021/2022. We combine this with the goal of better understanding the products of our suppliers with regard to their handling and effect on formulation concepts based on our own experience and to be able to offer our customers further added value in the consultation. At the same time, the identification of synergies between different raw materials helps to market our entire portfolio even better and thus also creates advantages for our principals.

As a distribution company, which products do you rely on in the personal care / home care sector?

SLI Chemicals focused on sustainability at a very early stage. Today, care and functional ingredients of plant origin as well as products from controlled organic cultivation are part of the core range. Aspects such as the regionality of the raw materials or their starting products are also playing an increasingly important role. On the one hand, we are responding to the increasing awareness of consumers on sustainability aspects. At the same time, we can minimize supply risks, and reduce environmental pollution through shorter transport routes along the entire supply chain. Our partner Cosun from the Netherlands is a very good example of this: On the basis of sugar beets and chicory roots grown in the Netherlands, rheology additives and inulin for cosmetics, as well as high-performance additives for the detergents and cleaning industry, are obtained. The aim is to use innovative production technologies to utilize all the components of the plant during the value-added process and to put them to sustainable use.

Another versatile group of products are the starches of our long-standing partner Agrana Stärke from Austria. While starches were used in the cosmetics industry for many years primarily to optimize sensorial properties or as fillers, AGRANA has enlarged their starch portfolio over the time with special modifications, sensitized selection of grades and improved process steps. As a result, they are increasingly used as styling additives, to stabilize emulsions and rinse-off formulations and as a replacement for so-called microplastic raw materials. In short, they are developing more and more into the all-rounder in the formulation of cosmetics.

Which raw materials are new in your portfolio?

We are particularly pleased that as of last year we represent EverCare for mineral UV filters based on zinc oxide for Germany, Austria and Switzerland. EverCare is part of the EverZinc Group and is one of the world's leading suppliers of zinc oxides for a wide range of applications in the chemical/technical and life science industries. The persistently increasing demand for natural cosmetics-compliant concepts has also increasingly reached the sun cosmetics segment for several years. The cooperation with EverCare gives SLI Chemicals access to an application segment within cosmetics that was to us while our synergistic product portfolio allows us to open up new customer segments for EverCare in a targeted manner.

Are you interested in other product representations?

In times of a constantly changing market environment, it is also essential for SLI Chemicals to continuously develop the product portfolio in order to continue to meet the needs of our customers and thus those of consumers in the future. Of great interest are products and solutions that allow long-term, sustainable business development, both ecologically and economically.

What major changes do you currently see in the market?

I myself have been working in the sales of specialty chemicals for 30 years. I experienced the biggest challenge so far during the real estate crisis in 2008, when the demand for chemical intermediates for the construction industry in particular suffered a significant slump almost overnight. The situation we are facing today, on the other hand, is many times more challenging. The global climatic changes with associated production and delivery bottlenecks, the geopolitical changes in many parts of the world, the still existing after-effects of the CORONA pandemic, changed consumer behavior, to name just a few aspects, will demand a significantly higher degree of flexibility from us. A particular challenge is certainly the persistently high rate of inflation in a market segment that has been highly competitive for years. Added to this are the effects of higher energy costs (especially for gas) and their further development, which cannot yet be precisely estimated for the coming months.

What are the next steps for SLI Chemicals in Personal Care / Home Care?

There are currently very concrete plans to significantly expand our business in the Industrial & Home Care area at the turn of the year and to further strengthen our team in sales as well as in the area of Regulatory & Compliance in order to support our planned growth with appropriate resources.