How should the domestic leader in flavors and fragrances rise?

The last report released on September 3 detailed the flavor and fragrance industry chain and product structure, analyzed the market supply and demand pattern, the growth of the industry and consumption attributes, and summarized the growth momentum of the industry and the leading players from the perspective of command. This article will analyze the changes in the overseas flavors and fragrances industry and the growth history of oligarchs from the perspective of overseas review, explain the changes in the domestic flavors and fragrances industry, analyze the future development direction of the Chinese flavors and fragrances industry from the perspective of evolution, decrypt the success genes of leading companies, and explore Domestic high-quality target.

Global market resumption

After a century of change and the history of overseas leaders at the industry level, the global flavor and fragrance industry has experienced the era of origin-the era of bulk fragrances-the era of high-end fragrances-the era of oligopoly. The Chinese market is expected to lead the growth in the future. At the enterprise level, international giants (Givaudan, IFF, Firmenich, and Dezhixin) broke through vanillin and other products in the era of bulk spices, and began to take a certain scale; in the era of high-end spices, international giants have deployed dihydrojasmonate Products such as esters and privet aldehyde meet the differentiated needs of the market. The concentration ratio CR7 increased from 36.7% in 1981 to 48.3% in 2001. In the era of oligopoly, international giants seek industrial chain-related M&A targets to build an integrated industrial chain and concentrate The degree of CR7 rises by more than 70%. Resuming the history, the leader opened its way with high R&D investment, created a differentiated product matrix through a diversified integrated layout, met the diverse needs of customers, and built core barriers.

Centennial Givaudan

R&D is the core, and diversified into the world's No. 1 Swiss company Givaudan (Givaudan) is the leader of the global flavor and fragrance industry, with a market share of 19.5% in 2017, ranking first in the industry. The company pays attention to R&D investment. In recent years, R&D investment has accounted for more than 8% of total operating income, which is significantly higher than other leading chemical companies. The high R&D investment has injected endogenous power into the company and continues to pioneer. The company is fully diversified, with business covering edible and daily chemical flavors, and more than 1,300 types of self-use flavors, fully meeting differentiated needs.

The company has perfected the layout of the integration of flavors and fragrances, and the revenue of flavors and fragrances accounted for 54.9% and 45.1% respectively, achieving coordinated development. After successful decoding, Givaudan used R&D as a spear to cast a kingdom of diversified flavors and fragrances, forming a strong barrier.

Domestic Grand View: Riding the Wind, the "Golden Era" of the Rise of Leaders

Synthetic fragrances in my country began in the 1950s and have gone through the initial stage-the rapid development stage-the international competition stage, and are now in the critical stage of transformation and upgrading from bulk products to high-end products, and competition barriers have risen. There is still a big gap between the domestic flavor and fragrance industry and overseas. Givaudan's 2018 revenue is similar to the scale of the Chinese market. The domestic industry concentration is relatively low, and the scale of enterprises is small. In 2018, the CR10 of China's flavor and fragrance industry was only 21.2%. Leading domestic companies have gradually risen, increasing investment in research and development, enriching product categories, extending the industrial chain, and are expected to grow and expand, and enhance their right to speak in the market.

Investment advice: optimistic about the domestic listed companies of Xinhecheng, Wanhua Chemical and Jinhe Industry

Xinhecheng, Wanhua Chemical, Jinhe Industrial, etc. are heading up to the trend, aiming at the opportunity of the industry's vigorous development and increasing concentration, and continue to make efforts to catch up with overseas giants. Xinhecheng is the largest synthetic perfume company in China, and its diversified integrated layout reduces costs and increases. The new project provides the company with growth wings. Wanhua Chemical plans to deploy citral, which is expected to use citral as an entry point. In the future, it is expected to gradually expand new fragrance products and create new growth points. Jinhe Industry is the leader in the global maltol industry. It has deepened its cost-leading strategy and deployed Jiale Musk products. It is expected to further enrich the product structure and achieve a strong growth.

Risk warning

1. Chemical safety accident risk;

2. The construction progress of new projects is slow.