Neochimiki plans further penetration into the production of private label detergents for supermarkets

Detergent maker Neochimiki has invested big and sees huge potential for future expansion in Eastern Europe

XPORTS of chemicals from Greece have been rising in recent years and the emerging markets in the Balkans represent a major opportunity for the industry to expand.

Making its mark on Greece’s developing chemicals industry is the family-run business Neochimiki, which holds a dominant position in the production of detergent for multinationals, and is gradually rolling-out businesses across the region to bolster its market share.

In 2003, a clutch of shares were issued by the firm through an initial public offering (IPO) on the Athens Stock Exchange, but control still rests firmly with President and Managing Director, Lavrentis Lavrentiadis, son of the company’s founder, who established the company 30 years ago.

“Feedback from investors has been positive,” he says of the IPO, which forms the basis for an expansion program that will see Neochimiki double sales in the next few years. In 2004, consolidated turnover is expected to be as much as 45% higher than the previous year.

The company has been quick to take advantage of the changes that have affected the industry since several large major players decided to halt production lines after Greece joined the EU.

As well as serving multinationals, it produces detergents on behalf of the major domestic supermarket chains such as Carrefour, Dia, and Vasilopoulos.

LAVRENTIS LAVRENTIADIS President and Managing Director of Neochimiki

“Right now we are the only company producing detergents for multinationals in the Greek markets,” says Dr. Lavrentiadis.

In the last few years, the company has invested big. It now owns a factory in Atalanti, central Greece, with 19 production lines, plus storage depots in Avlida and Thessaloniki. It is increasingly involved in the Balkans through its subsidiary in Romania, which is active in the wholesale of chemical products.

It also has a presence in Bulgaria, Serbia, Macedonia, Ukraine, and in Cyprus. Dr. Lavrentiadis thinks the company will be well placed as uncompetitive factories in Eastern Europe are forced to close down. “I believe that Neochimiki will be the leader in the distribution of chemicals in Eastern Europe,” he says. “We have calculated that in five years time, one third of our sales will be made in that region. In ten years time, the majority of our sales will be in that area.”

The potential is huge. The company forecasts sales of 400 million euros ($532 million) in five years rising to 1.3 billion euros in ten years. “There is huge potential for expansion and once you partner with the big boys you have a chance to grow steadily and vigorously,” says Dr. Lavrentiadis.

The company keeps a close watch on environmental issues. Its manufacturing facility in Atalanti maintains the highest standards of quality and efficiency, something which has helped the business improve its reputation with large and well-known global names.

Indeed, this is one of the factors that will help the company secure new business in higher value areas. Neochimiki profit margins will significantly improve, for example, via further penetration into the production and wholesale of private label detergents for supermarkets, an area of high importance for the firm.

Dr. Lavrentiadis is also eager to take advantage of the growing awareness of organic detergent products. “The potential for growth in this market is very high as these products are regarded as luxury products. They provide a higher added value,” he says.

The Atalanti factory has already been certified by Italian authorities to provide organic detergents. The U.S. market holds potential in this area too. “What we would like to do in the future is distribute in the U.S. a number of Greek and Mediterranean organic health products such as olive oil, soaps, or herbs,” concludes Mr. Lavrentiadis.