Henkel taps into megatrends

German industrial giant Henkel is tapping into China's megatrends through market-driven innovations and developing leading technologies amid rising demand for smart manufacturing and quality products, said Jeremy Hunter, the company's president in China and its Asia-Pacific head of transportation and metal.

As China's manufacturing sector requires more environmentally-friendly, cost effective and energy-efficient solutions amid the transformation from "the world's factory" to a true manufacturing power, boosted by the Made in China policy, long-term strategy and clear strategic priorities are important for businesses eyeing long-term quality growth, said Hunter.

In the first quarter of 2017, Henkel achieved a strong financial performance, reaching record sales of 5.064 billion euros ($5.647 billion). All regions achieved organic sales growth, with Asia-Pacific sales growing by 9.1 percent.

In terms of sales, China is Henkel's third-largest market globally. The German company has been very active in cooperating with local partners in China, including home appliance company Midea and e-commerce giant Alibaba.

Following the goal of smart manufacturing and structural reform, China is shifting its focus from productivity expansion to productivity enhancement, and is determined to change its role from low-cost manufacturing to high-end manufacturing power worldwide, and all these trends create opportunities for enterprises with products and services meeting the upgraded manufacturing and consumption in the market, said Hunter.

"China's strong focus on high-quality growth presents Henkel with unique opportunities. Henkel is involved in China's high-speed train and aircraft programs, light-weight automotive initiatives, new energy vehicle manufacturing, LED lighting and consumer industries. We also see that China is shifting towards a sustainable economy by encouraging innovation and technology-driven development," he said.

For example, in the field of environmental-friendly and energy-efficient solvent-free adhesives, China is now leading the solvent-free adhesive market in the Asia-Pacific region with a market share of around 10 percent in solvent-free adhesives for flexible packaging. Henkel sees emerging markets as possessing great potential and is ready to contribute to their development.

Henkel's products are also widely used in the emerging drone market, which is expected to reach $5.8 billion by 2021, according to market research by IndustryARC.

"Within the Asia-Pacific region, China is an attractive market for adhesive technologies. The global adhesive market is a 65-billion-euro market and China accounts for roughly 10 billion euros. Market demand from end-user industries remains significantly high compared to demand in Western countries", said Hunter.

Henkel's digitalization strategy is in accordance with China's Internet Plus strategy and China's urge to shift from productivity expansion to productivity enhancement.