Henkel: 'We are very encouraged by China's priority on sustainable development'

Henkel AG, a Germany-based chemical and consumer goods company, has been in operation for 142 years, 30 of them in China’s mainland. In 2017, the company reported revenue of about 20 billion euros (US$22.86 billion).

Among its high-profile brands are Schwarzkopf beauty products, household products such as Persil detergent and Loctite adhesive products.

Henkel, based in Dusseldorf, is the world market leader in adhesive technologies, one of the company’s three core arms, which accounts for more than half company revenue. The unit’s products include adhesives, sealants and coatings for industry and consumer markets.

Michael Olosky, president of Henkel Asia Pacific, talked about the company’s operations in China in the last three decades during an interview with Shanghai Daily.

Q: What does Henkel consider its milestones in China after 30 years here?

A: When we established our Beijing office in the late 1980s, Henkel donated 500,000 Deutsche marks to the renovation of the Mutianyu section of the Great Wall and provided special adhesives for the repair work. Today, you can still find a memorial stone installed by the Beijing government to commemorate Henkel’s contributions.

Since then, we have steadily increased our investment and have built a strong foundation, with around 5,000 employees in 29 sites across China.

In 2007, Shanghai became home to our headquarters in China. Last year, to meet the demands of our growing business, we set up the Henkel Management Center in the Yangpu District as our new Asia headquarters. We employ 1,500 people there.

In 2013, Henkel opened the world’s largest adhesive plant, also known as the “Dragon Plant,” at the Shanghai Chemical Industry Park in the Jinshan District to deliver innovative adhesive technologies more quickly to the growing number of customers based in the region. With more than 50 million euros invested since 2010, the plant has the potential to expand capacity to a maximum of 428,000 metric tons of adhesives annually.

In 2015, the Henkel Adhesive Innovation Center was established in Shanghai to expand the company’s research and development.

Q: Which industries do you think ben­efited most from Henkel’s development in China during your 30 years here?

A: The development of China and the growth of enterprises, such as Henkel, are inseparable. With China being one of Henkel’s top three markets globally, we have been providing high-impact, tailored adhesives, sealants, and functional coatings to a wide range of local industries. For example, Henkel has been working closely with China’s automotive, semiconductor and 5G industries for years.

In the automotive industry, our broad portfolio of adhesive solutions covers more than 300 applications helping to make cars safer, more sustainable and more comfortable. The technologies, for example, enable lightweighting and respond to the future challenges of electric vehicles and autonomous driving.

Another success story is China’s semiconductor industry, which according to the China Semiconductor Industry Association, surged by 24.8 percent to 541.13 billion yuan (US$77.83 billion) in 2017, while the chips testing and the chip-packaging industry grew by 20.8 percent to 188.97 billion yuan. Notably, Henkel is the market leader in the chip adhesive market in China. Henkel’s Waigaoqiao site in the China (Shanghai) Pilot Free Trade Zone has been a leading player in the development of China’s semiconductor industry over the past 13 years. It not only serves as a key global center for production and innovation, but also as a training center for developing local talent.

Q: What are the most impressive changes you have seen in China from Henkel’s perspective?

A: China has made significant progress in recent decades, notably in its transformation into an innovation-driven economy and the modernization of manufacturing. Consequently, we have seen increasing demand for Henkel’s high-impact and customized adhesives, sealants and functional coatings across various industries.

We are very encouraged by China’s priority on sustainable development, which aligns with Henkel’s commitment to a leadership role in sustainability.

For me personally, I have been greatly impressed by the remarkable progress in Chinese society, which I’ve observed in the daily lives of people. In my six-and-a-half years in China, I’ve traveled around the world a lot, and whenever I come back to China, there’s always something new, something ground-breaking.

I’m very impressed by innovations such as apps for mobile payments, shared bikes, and food delivery. These emerging technologies and business models are injecting new energy into the country’s economy.

Q: Could you talk to us about Henkel’s corporate social responsibilities?

A: Sustainability is one of Henkel’s five corporate values. Our sustainability strategy is to achieve more with less, with the goal of tripling the value of our company’s operations, products and services by 2030, from a base year of 2010, while reducing our environmental footprint.

In China, for example, our Dragon Plant in Shanghai, the world’s largest adhesive plant, utilizes technologies to enhance energy efficiency and reduce waste.

These include an enclosed chilled-water recycling system to reduce water use by 50 percent; a solid waste recycling program to reduce packaging materials disposal by 60 percent; special translucent roofs to cut electricity usage for lighting by 90 percent; a system that recycles 100 percent of waste heat from air compressors; and loading bays designed to eradicate the risk of leaks and spills.

Notably, a focal area of Henkel’s sustainability strategy is to boost our employees’ engagement in sustainability.

Henkel’s Sustainability Ambassador program was launched in 2012 to train and equip our employees to share their knowledge with people at work and with local communities.

By the end of 2017, more than 50,000 employees were certified as Sustainability Ambassadors.

Q: How do you see China’s future development? What challenges does Henkel face?

A: As China seeks to balance economic growth, social well-being, and environmental health, sustainable development will be a top agenda not only for the government, but also for more and more businesses. There will also be greater consciousness of the need for responsible consumption and environmental protection.

In the rapidly developing markets of China, a key challenge for all companies is to meet constantly changing demands. On the other hand, the competition for talent is intensifying. We pay attention to developing our employees while working closely with leading universities to attract new talent to our team.