Economic success, sustainability and social acceptance are inextricably linked. We believe this wholeheartedly. For this reason, we have made sustainability an integral part of our corporate strategy at Symrise. The goal is to continuously increase the value of the company and to minimize risks. In this way, we strengthen the future viability of our company.
Companies are first and foremost economic entities. They meet demand in a wide variety of markets, combine input factors to produce outputs, generate profits and meet the return requirements of capital providers. This traditional understanding of the company is still fundamentally correct, but incomplete. After all, the world population that needs to be fed is approaching the eight billion mark, the effects of global warming are becoming increasingly dramatic, and the natural resources of our planet are being plundered unabated. We – and this also applies to companies – must meet these challenges. Companies are only socially accepted and viable if they go beyond their economic function to contribute to sustainability, thus forming part of the solution rather than part of the problem.
The Symrise business model is based on the diversity of nature. We manufacture our approximately 34,000 products based on around 10,000 – mostly natural – raw materials such as vanilla, citrus products and flower and plant materials. Nature is a source of inspiration and innovation for us. Symrise has therefore always been committed to protecting biodiversity. Going far beyond this, we aim to increase our sustainability performance along the entire value chain. We set a milestone in our sustainability concept in 2020 with the goal of having climate-positive operations starting in 2030. From this point forward, the business activities of Symrise are expected to contribute to preventing or sequestering more greenhouse gas emissions from the atmosphere than we produce through our operating activities.
The integrated corporate strategy at Symrise links our economic ambitions with the commitment to our four sustainability approaches:
Minimization of our environmental footprint
Maximization of the environmental added value of our products
Maximization of the sustainability of our supply chain
Creation of lasting value for all stakeholders
In economic terms, Symrise focuses on the three drivers of growth, efficiency and the portfolio. In order to gain market share, we aim to achieve above-average organic sales growth of 5 – 7 % (CAGR). One lever here is early and vigorous engagement in rapidly expanding emerging markets. For example, Symrise has been present in Brazil since 1956, in China since 1982 and in India since 1994. In addition, we want to further deepen the collaboration with our customers by bringing our broad product range to them in an even more targeted manner. Furthermore, we make sure that we remain innovation leaders in our core competencies. To support its growth course, in 2021 Symrise made investments of € 174 million in property, plant and equipment and intangible fixed assets (excluding acquisitions). These include the construction of a pet food production plant and a new development and application center for Taste, Nutrition & Health in China, a new pet food production plant in Brazil and expansion of Scent & Care activities in Spain. Growth investments that also serve to reduce greenhouse gas emissions included the construction of new heating and cooling facilities at ADF/IDF in the USA, a modern energy system in France, and the expansion of cogeneration capabilities at the headquarters in Holzminden.
of sales are already achieved in new business areas.
These measures to increase efficiency support our goal of staying one of the most profitable companies in the industry over the long term. They mainly concern the improvement of internal processes and optimization of the raw materials portfolio. When it comes to improving internal processes, the spectrum ranges from the Group-wide bundling of sourcing processes to warehousing and receivables management to the increased use of artificial intelligence (AI) in research and development. Optimization of the raw materials portfolio involves reducing the number of raw materials used, improving yields, expanding the backward integration of strategic raw materials and also ensuring traceable, reliable and consistently high-quality supplies. Backward integration also enables long-term social commitment in regions where vanilla, citrus fruits and patchouli are grown, for example.
It should reach over the next few years, for growth and profitability.
Symrise’s integrated corporate strategy
Sustainability along the value chain
With our integrated corporate strategy, measures to increase efficiency often go hand in hand with an increased contribution to sustainability. Efficient use of natural raw materials, for example, has a positive impact on both our profitability and the environmental impacts of our activities.
What will our customers and global consumers want and need tomorrow, or the day after? Which of our products can achieve above-average margins thanks to our innovative strength and our expertise in sustainable product solutions? Which business areas outside the traditional fragrance and flavor industry are opening up new growth potential? The third pillar of our integrated corporate strategy – continuous optimization of our business portfolio – addresses these questions. While the traditional Flavor and Fragrance markets are growing very solidly at an average of 3 – 4 % per year, the pet food market, for example, is expanding at an annual rate of 7 – 8 %. Symrise was the first company in the industry to begin moving into neighboring business areas years ago. Today, we generate a good 30 % of our sales in new divisions. We aim to increase this proportion to over 50 % over the next few years, for growth and profitability. Additional acquisitions and partnerships support this path of expansion, such as the strategic investment in the Malmö-based company Swedencare, a supplier of health products and nutritional supplements for pets, in the summer of 2021.
One of many examples
A strategic course set in 2021 pays into all three elements – growth, efficiency and the portfolio. Since April last year, we have combined the two divisions of Flavor and Nutrition to form a new Taste, Nutrition & Health segment under single management. Its focus is on product solutions that combine taste, nutrition, wellness and health in food, beverage, pet food and aquaculture applications. The levers bringing us closer to our goals are expansion of the product range, a focus on a joint research pipeline, cross-coordinated customer support, and additional synergies in the supply chain and in the internal organization.
Our integrated corporate strategy combines dynamic growth, sustained high profitability and continuous, tangible improvement in our sustainability performance. Additionally, the core function of corporate financing has incorporated sustainability aspects since May 2021. For the first time, Symrise agreed on a revolving line of credit with a specific sustainability component in the spirit of “green finance.” Its interest margin is linked to the reduction of greenhouse gas emissions, responsible procurement practices and efficient water consumption. The € 500 million credit line is being used to finance strategic growth initiatives. Growth, profitability and sustainability will determine the future of our company.
Corporate strategy beyond sales growth and EBITDA margin: Symrise has its sights set firmly on non-financial key performance indicators.
Greenhouse gas emissions
Sensitive waste and chemical oxygen demand