Consumer & Resources Protection
Leading with customer-focused, innovative smart solutions for a consumer-centric healthy environment, the Consumer & Resources Protection division addresses a wide range of industrial markets, as well as the global agricultural markets. We strive to develop environmentally sustainable and innovative technologies in response to our customers’ demands and the increasing challenges presented by the global regulatory landscape. Please see our Sustainability Report for further information.
Coatings and Composites Offerings
Lonza’s coatings and composites businesses serve global markets with a wide array of specialty solutions for the protection, enhanced performance and modification of the end-use characteristics of various materials, including carbon fibers, fabrics, leather, metals, plastics, stone and wood.
composite resins systems
Our specialty biocide and non-biocide products are used to produce coatings that are applied superficially or by penetrating processes. They protect the materials from biological (e.g. insects, decay, algae, mold and mildew) degradation and physical-chemical (e.g. fire, moisture) degradation and are applied in paints, inks, sealants, adhesives, backing materials for bath mats and carpeting, shower curtains, wallboards, flooring and ceiling materials, wood preservatives and many other applications.
We also deliver specialty solutions for in-process or end-of-process application in the manufacture of various composite materials (e.g. wood-plastic composites, laminated veneer, wood-based products, etc.) Our composite thermoset resin systems are used in modern consumer electronics to help enhance performance, as well as in the production of lightweight, reliable structural and interior elements for passenger aircraft.
Our agricultural businesses provide highly effective products and contract manufacturing services designed to improve crop yields and food quality. These dedicated offerings include agro specialty solutions, custom manufacturing and animal nutrition. We supply products and services to industrial customers, as well as finished products for end use by agricultural enterprises and farmers.
The world leader
in Metaldehyde based Molluscicides
Lonza’s offerings to the agricultural markets are derived from our unrelenting focus on customers’ needs and requirements and are based on our expertise in chemical and biological technology. The agro solutions business includes industrial intermediates, preservatives and additives for agrochemical formulations in addition to a broad range of final crop-protection products.
Our state-of-the-art custom manufacturing supports customers in the production of modern herbicides, insecticides and fungicides, including biologically derived products, such as biopesticides, biostimulants and other microbial active ingredients and intermediates. Lonza’s services also include full life-cycle management for customers’ products.
The animal nutrition business offers animal feed additives and supports the production-animal sector by providing branded, high-quality ingredients with clear benefits that are reinforced by our distributors and agents around the world. Examples include our vitamin B3 compounds (niacin and niacinamide) and our Carniking® and LaraFeed® products. For the beneficial impact of Carniking® on the performance and recovery in active dogs, Lonza has been granted a U.S. patent.
Highlights and Initiatives 2018
The specialty portfolios within Consumer & Resources Protection, especially in composites and material protection, reported ongoing positive demand and performed strongly as expected. We continued to leverage our leading position and expertise in microbial-control solutions to attain greater market penetration in various industrial applications.
Newly launched solutions to address regulatory changes and related market uncertainty resonated well with all major customers and generated strong customer interest. Feeding into the increasing global market demand for methylisothiazolinone (MIT)-free biocide formulations, the coatings and composites businesses announced the launch of a new addition to the Proxel® range of preservatives into the North American market, the Proxel Spektra™ Preservative. This dual-action, broad-spectrum preservative offers effective protection of industrial products against spoilage caused by bacteria, yeast and mold. This formulation benefits from the use of two complementary active ingredients, providing enhanced antimicrobial efficacy and long-term protection while being more beneficial for our environment.
Helping our customers meeting the Biocidal Products Regulation (BPR) in Europe, in 2018 we also introduced Tanalith® E9000, a BPR approved industrial and residential preservative for solid wood applications. Tanalith® E9000 contains the highest level of BARamine® that makes the preservative more robust against aggressive wood-destroying fungi. Growth initiatives in the innovative and highly specialized solutions portfolios of engineered wood and mold control further helped balance soft demand for and the effects of discontinuations within the basic materials and intermediates portfolio.
In our agricultural business, we are a leader in the molluscicide market and offer a number of solutions to help farmers protect their crops. Our active ingredient META® metaldehyde and our formulated products, generally marketed under the Axcela® brand, are now all sold globally. Slugs and snails can pose significant problems for both the professional grower of agricultural crops and gardeners. Molluscicidal baits that contain Lonza’s Meta® active ingredient are an effective way of controlling slug and snail pests. In 2018 we successfully expanded our product offering through geographical and portfolio expansion in New Zealand, South Korea, Taiwan, Turkey, Germany and France. With Celenco® AG+ we launched a compatibility adjuvant for crop protection, thus strengthening our position in Malaysia. Similarly, the launch of Pylon®, a pyrethrum-based insecticide for fruits and vegetables, bolstered our position in New Zealand.
Whereas our specialty offerings and customer-specific solutions in Consumer & Resources Protection continued to see high demand, several negative developments created headwinds for the division. A challenging environment for cyclical businesses in mature parts of the portfolio, like basic materials and intermediates, as well as raw material price increases and supply-chain constraints, had a negative impact in 2018.
Results were also influenced by the ongoing downward cycle for basic feed ingredients, especially for vitamin B3. It translated into significant lower prices and volumes for this part of the agricultural business. Our marine antifouling business remained soft, as expected, in line with lower demand in global shipbuilding and maintenance. Some positive momentum was obtained from tightened regulatory frameworks in emerging markets.
Operational and commercial excellence initiatives are ongoing. We also launched an initiative to supply a certain set of raw materials out of our multi-purpose plants in Visp (CH) that meets the highest levels of environmental standards. Customers have now started to switch to Lonza for certain raw materials as we offer proven reliability.
Despite these headwinds the division delivered CHF 1.3 billion sales for 2018 (1.2% organic growth versus prior year). CORE EBITDA was CHF 236 million (-21.3% versus prior year) with a CORE EBITDA margin of 17.9%.
The restructuring of the basic materials portfolio was ongoing in 2018, with discontinuation of non-core activities, such as the fertilizer business, while the emphasis on innovative offerings increased.