Innovation: the most important ingredient

ShowRoomBased in Gorla maggiore, in the northern province of Varese, Sinerga has been acting as a key player in the Italian business to business cosmetics arena and can today display a 70% share of exports, being its success based on the focus the company keeps on research and development. Established 35 years ago in Pero (Milano), then moved to Gorla maggiore near Varese but less than 30 kilometers from Milan, Sinerga has developed an important and successful experience in many sectors of the cosmetics industry. As a supplier for major producers in the segment, it provides top-class multi-national players with a best of breed portfolio of ingredients and raw materials, but also owes a part of its success to the research and development activities to which at least 20 of the 70 overall employees are devoted. Being its revenues mainly based on exports, which account for 70% on Sinerga’s business, the company is now focusing on new unexplored markets, as vice president and CEO Alessandro Fontana told to KosmeticaWorld. Sinerga is committed to such segments as contract-manufacturing of cosmetic and dermo-pharmaceutical products; formulation research and development, cosmetic and raw materials specialties and marketing support to customers.

Alessandro Fontana.
Alessandro Fontana.

Today Sinerga’s business is strongly focused on exportations: but what countries and strategies are you leveraging on to increase and improve the company’s global market share?
Sinerga’s been operating in the global arenas for more than 20 years and nowadays overseas sales represent a major part of its business, contributing to our overall revenues with a 75 percentage points share. Sinerga’s two main business units are both concentrating their efforts on succeeding in the international markets by opening direct branches in the most important countries without leveraging on distributors and channel partners anymore. This is what happened with Sinerga France, that opened up its offices some 15 years ago; and this is the policy we are about to pursue with our recently established headquarters in the United States, officially inaugurated last November; and in Shanghai, China, where we are ready to start our operations by the end of 2014. The point is that we have already developed an in-depth vision of the markets we are in, we do perfectly know our channel allies’ needs and thus we can directly refer to end-customers without necessarily having to rely on any sort of intermediate player, be it a dealer, wholesaler or a reseller.

Could you briefly describe, Mister Fontana, Sinerga’s major business units’ peculiarities?
One of them is focused on a technical and scientific approach to business, referring to a fully owned research center that numbers today some 20 specialized employees at least. The latter of those is impersonated by the so-called Trends Lab, concentrated on analyzing trends and habits in final customers’ behavior in order to fulfill their demands and needs. This means that in order to provide our customers with a complete portfolio of solutions Sinerga is somehow shifting from the business to business side of its activity to the business to consumer or B2C area. Our Trends unit is both a lab and a forge for new business ideas focused on creating new patented ingredients and raw materials for the cosmetics industry. Our raw materials are sold in no less than 25 countries worldwide also leveraging on our contract-manufacturing duties as a third party player for many multi-national companies, in the higher added value, driving segments of perfumeries and pharmacy. What we still believe difficult to face at the moment is the mass market, being our added value significant, as I said before, and our technology excellent. To succeed in the mega-mall and mass-distribution channels you have to adopt different strategies.

What trends and needs are today orientating the end-customers’ demand, in your opinion?
We only established our Trends laboratory some three years ago when we also started cooperating with such professionals as Astra Ricerche’s professor Enrico Finzi. Today Sinerga is carrying on a strong and successful partnership with the Iulm university (mainly focused on foreign languages, marketing and communications) whose goal is to analyze the basic trends of the made in Italy consumption in such areas as food, fashion and enology, for instance. Cosmetics are a lot closer to them than one may eventually think; but our target is now to identify a series of what we call mega trends that can be translated into end products and raw materials and some of those could be identified with multi-sensorial approaches or seasonal cosmetics. That means an individual’s skin changes with the varying of his/her nutritional habits and finally with seasonal and climate changes. We are trying to develop forms of cooperation with students and teachers at the Milan-based Iulm, to better address the markets’ request and ultimately to better perform.

Another area you are committed to is medical devices: could you spend a few words on it?
It’s a most interesting sector since we feel like we can play a prominent role in it by exploiting our technological skills. Indeed medical devices are pharmacy-related and in fact some refer to them as to quasi-drugs. They can actually count on a market and a customer base of their own but also require rigorous and challenging safety, control, quality and clinical tests. Of course, pharmaceutical research requires much more engaging and enduring research and development activities but the pharmaceutical industry we are committed to is interested in this kind of offer and Sinerga undoubtedly possesses all the necessary characteristics to satisfy its needs, at the moment.

What countries is Sinerga planning to enter in the near future? And is the Middle-Eastern macro-region, that you still did not mention, a possible target in the short-medium term?
There is no doubt the Asia-Pacific region is one of the most attractive and whilst already addressing it with a network of dealers and distributors, Sinerga is thinking about serving it directly with a series of fully-owned branch offices, especially when we look at India, Thailand, Singapore, just to mention a few. Brazil is one of the most attractive States in South America while we are also aimed at expanding our business in Europe with Germany, the United Kingdom and France on top of the desiderata’s list. Turning to the Middle East countries, it has to be said they all display original characteristics and peculiarities and thus require a tailored strategy. Five years ago or so the cosmetics’ market was in the hands of such foreign multi-national players as Nivea or Lancome without having developed any local-based production. Manufacturing is still lacking in those areas but we are now exploring their potential and to leverage on them is one of our future goals.

Does the made in Italy label still represent an added value on the global market and, generally speaking, do you believe in a re-launch of the Italian cosmetics’ industry as a whole?
The Italian industry still shows to be a real benchmark worldwide when it comes to technology, competences and skills, although design and manufacturing simply do not live here anymore and whenever a company needs to get in touch with global business leaders than it has to cross the Alps since none of them is anymore headquartered in the country. But if one only thinks that 64% of the worldwide make-up products are manufactured in Italy, than it is easy to understand how important the Peninsula is on the international scenarios. Italian cosmetics is strictly related to such industries as fashion, of course, but also as food, wine and design, for instance, whilst clothing and perfumes often proceed together in the global markets, as Armani’s brand’s fortunes clearly demonstrate. Food is indeed no stranger to this trend and, alike cosmetics, it translates into culture and fine art. Thus, there is a whole lot of synergies to be created or to be developed and enriched in the field.

What are your near term financial forecasts and what is the amount of Your R&D budgets?
After the +30% in revenues we recorded in 2013 we are confident Sinerga can maintain this year a 20-25 percentage points growth rate and the results we reached in the first quarter of the year are definitely encouraging. Of course research and development is one of the key-elements for our performance and we are planning to keep investing on the issue in the future too. Of our 70 employees, 20 at least are devoted to innovation, the most important ingredient in our portfolio.

Sinerga’s specialties
In its 35 years in the business Sinerga has developed an experience in a variety of businesses, including the contract-manufacturing of cosmetic and dermo-pharmaceutical products; formulation research and development, cosmetic and raw materials specialties and marketing support to customers worldwide. Also, in recent years, the northern-Italian company has decided to enter the industry of medical devices, in an attempt to differentiate its strategies and enrich its offer portfolio to better address the perfumery and pharmaceutical markets worldwide.

Trends lab
One of Sinerga’s key areas of activities is represented by the Trends Lab, that cooperating with professor Mauro Ferraresi from the Iulm university supports the company in forecasting trends in a variety of different fields of material culture, approached with an ethnographic analysis and a clear mission: to merge the sociological knowledge with the technical expertise of the R&D laboratory; to anticipate product ideas to the cosmetics companies, in line with future market trends presenting solutions (raw materials and finished products); play a proactive role as a supplier and thus meet the needs of customers more effectively.

by R. Carminati