Update on the Cosmetic Ingredient Distribution Business in Brazil

Sumitomo Corporation (head office: Chuo-ku, Tokyo; President & CEO: Kuniharu Nakamura), Sumitomo Corporation of Americas and Sumitomo Corporation do Brasil S.A. (hereinafter collectively referred to as “Sumitomo Corporation Group”) have increased the Sumitomo Corporation Group’s ownership of Cosmotec International Especialidades Cosmeticas Ltda (hereinafter “Cosmotec”) to 95% by additionally buying 14% of the total shares.
 
The market size of cosmetics, including skincare and hair care products, is said to be about 50 trillion yen. Within this market, the ingredient-related segment is valued at around 2 trillion yen and is expected to continue to expand at an annual rate of 3%. Brazil is one of the world’s foremost cosmetics markets, and demand for formulation services as well as for materials with high functionality is expanding with an increasing number of multinational cosmetic manufacturers entering the local market at a faster pace. With the additional share purchase, Sumitomo Corporation will enhance its earnings base in the rapidly growing Brazilian market while also making use of its global supply network and Cosmotec’s rich product lineup, including containers and fragrance materials, with a view to responding to the demand that is expanding across the South American market, not limited to Brazil.
 
Sumitomo Corporation began full-scale operation of its cosmetic ingredient distribution business when it acquired 100% ownership of U.S. cosmetic ingredient sales company Presperse Corporation in 2010. Subsequently, in 2013, Sumitomo Corporation entered the Brazilian market through Cosmotec and, in 2015, acquired the cosmetic ingredient sales business from the European subsidiary of Kyowa Hakko Bio Co., Ltd. to enhance the business base in the Americas and Europe—the world’s leading cosmetics markets. Moreover, in 2012, in order to expand the business domain and add more value to its offerings, Sumitomo Corporation invested in Biogenics, a South Korean venture specializing in cosmetic material technologies, for the joint development of materials by the use of new technologies. By making use of the strengthened business base, Sumitomo Corporation will support its existing customers in expanding their businesses overseas and promote the sales of the individual companies’ products to different regions for the generation of synergies, while at the same time enhancing its own business, including fostering development in the Asian region, which is expected to grow into a larger market.
 
Functions to be played by cosmetics will be further advanced and diversified according to regions and trends, including whitening, skincare and the anti-aging function increasingly needed due to the aging of society. In order to operate the cosmetic ingredient distribution business as a global partner for cosmetics manufacturers, Sumitomo Corporation will make use of the globally trusted technologies of relevant Japanese manufacturers and will thereby meet the beauty- and health-related needs of global users.