Health & Beauty

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Cosmetics

Market Overview

The population with access to modern cosmetics is expected to grow by 50% over the next 20 years, boosted by the rapid rise of the urban middle class in the new markets.

Health & Beauty

Source: EY luxury and cosmetics factbook 2014

A booming industry in Growing Asia*:

Health & Beauty

Source: EY luxury and cosmetics factbook 2015

A strong industry in Europe:

  • W. Europe per capita expenditure ~EUR 150/year vs. ~EUR 30/year in growing Asia
  • W. Europe is at the forefront of patented cosmetics formulations

Opportunities & Trends

Travel retail contributes 24% of global growth.
Market consolidation in growing Asia offering unique JV opportunities

  • Fragmented market due to the boom of cosmetics products demand during the last decade
  • Offering JV/ acquisition opportunities
    • Western Europe players = industry expertise, brand-building know-how
    • Local players = manufacturing in compliance with local standards and Asian consumer taste know-how

*Growing Asia means ASEAN, India and China
** Cosmetics= color cosmetics, skin care, sun care and hair care

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Pharmaceutical

Market Overview

Growing Asia* spending on Medical Products is to reach USD 342B by 2021 (+10% CAGR 2016-2021) driven by growing Asian economies and their populations.

Health & Beauty

Source: GCF Research & Analysis, Euromonitor

China is the N1 Market in medical products expenditure (78% of total Growing Asia spending in 2016)

  • Projected to reach USD 263B by 2021 (9% CAGR)

Indonesia is the N1 Market in ASEAN (22% of total ASEAN spending in 2016)

  • Projected to reach USD 7.2B by 2021 (12% CAGR)

India is one of the biggest producers of generics in the world

  • Strong local manufacturing sector: 270 large R&D-based pharmaceutical firms

Opportunities & Trends

Asian firms can serve as a platform to drive registration work for imported products.

  • Average 5 strategic buyers for 1 target in Growing Asia
  • Over 90% M&A deals’ value in pharma in Asia are below USD 50M

Indonesia will drive M&A activities in the region

  • Domestic drug companies control about 75% of the market
  • Gov. willingness to allow 100% foreign ownership of local companies (under progress; currently 75%)
  • Gov. willingness to privatize state-held pharma companies (OTC local majors)
  • Distribution is limited to products manufactured locally

*Growing Asia means ASEAN, India and China

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Nutrition

Market Overview

Global and regional per capita food consumption
kcal per capita per day

Source: The Food and Agriculture Organization (FAO)

Improved living standard among the growing middle class and increased health awareness are stimulating purchases.

Demand for safe and nutritious food will rise drastically across the Growing Asia* in the next 5 years,
from USD 3T in 2014 to USD 3T by 2019.

  • Demand for imported products, regarded as safer since the recent melamine scandal, has been pushing prices up in China.
  • Indonesia has the world’s 4th largest population, around 22M children under 4, Asia’s 2nd-highest birth rate and rising wealth.
  • India has the largest population <4 in Asia and food consumption is expected to x2 by 2030.

Opportunities & Trends

Asian large food companies are increasingly looking abroad to meet future demand for safe, high-quality food at home.
2015 YTD, food sector deals account for 17% of all overseas acquisitions in China.

  • Dec 2014: 90% acquisition of an Italian olive oil producer (SALOV) by BRIGHT FOOD
  • Feb 2014: 51% acquisition of a giant Dutch agricultural commodity company (NIDERA) by CHINA NATIONAL CEREALS, OILS AND FOODSTUFFS CORPORATION
  • Sept 2013: 100% acquisition of a US pork producer (SMITHFIELD FOODS) by SHUANGHUI INT
  • July 2013: Acquisition of a minority stake (20%) by BIOSTIME into the French baby formula company ISIGNY
  • May 2012: 60% acquisition of a UK breakfast cereal manufacturer (WEETABIX) by BRIGHT FOOD

Food companies will need to make investments to maintain the integrity of their supply chains, notably in China.

*Growing Asia means ASEAN, India and China