Germany’s Henkel KGAA has consolidated its U.S. hair products business in Irvine.
The move follows Henkel’s buy last year of Costa Mesa’s Advanced Research Laboratories Inc. for a reported $225 million.
Advanced Research makes trendy hair gels, shampoos and other products sold under the g & #246;t2b and Citr & #233; Shine brands.
Henkel’s new offices along the Costa Mesa (55) Freeway on Irvine’s border with Santa Ana resulted from the combination of Advanced Research and another unit, Schwarzkopf & Dep Inc., which moved from Rancho Dom-inguez.
Both companies fall under Schwarzkopf & Henkel, a division whose name is on the building on McGaw Avenue.
Henkel, based in Dusseldorf, is one of Europe’s top makers of detergents, toiletries and cosmetics. Last year, it acquired Arizona’s Dial Corp. for $3 billion as part of its U.S. expansion.
The Schwarzkopf & Henkel division, which also makes Lavoris mouthwash and Topol toothpaste, has $2.7 billion in yearly global sales.
Schwarzkopf & Henkel’s hair products business employs about 120 people in about 35,000 square feet of space in Irvine.
The unit counts another 70 sales people worldwide.
Thomas Parr, former chief executive of Advanced Research Laboratories, is president of the division.
Job Losses
Advanced Research and Schwarzkopf & Dep, maker of Dep and L.A. Looks hair gels and other products, lost about 100 workers between them in the combination, said Christoph Kirchner, vice president of finance for the division.
Many were overlapping jobs, he said, while some workers didn’t want to commute to Irvine.
In a separate move, Henkel’s electronics group, which makes adhesives for semiconductors, combined three research, development and engineering units in Irvine last month (see story, this page).
When Henkel bought Advanced Research a year ago, the company was looking at what to do with it and Schwarzkopf & Dep some 35 miles up the coast.
At the time, Henkel said it planned to combine the two units somewhere in between, an area roughly around Long Beach.
Henkel opted for Irvine for its easy access to the freeways, Kirchner said.
Orange County’s cachet also is good for the company’s cosmetic culture, he said.
Some of the people who used to work in the Rancho Dominguez Dep unit drive to Irvine, including Kirchner. He said he lives in Palos Verdes and drives about an hour to get to Irvine.
Division head Parr lives in OC.
Schwarzkopf’s main focus is sales and marketing and research and development for hair products.
G & #246;t2b from Advanced Research has become one of Schwarzkopf’s best selling hair products, according to Kirchner.
The line recently debuted Germany, where it has been well received, he said.
Most American products do well when taken worldwide, Kirchner said.
It doesn’t always work as well the other way around, he said.
“We haven’t really brought any brands from Europe yet,” Kirchner said.
Henkel has tried.
A few years ago Schwarzkopf brought Fa bar soaps and shower gels here.
The products, a European mainstay, “didn’t go over” here, Kirchner said.
The company doesn’t have plans now for new products, according to Kirchner.
But it’s redesigning some packaging for Citr & #233; Shine, which he said is set to get a more professional look.
Made in USA
Shampoos and conditioners are made in the U.S. for the most part.
“There’s still a lot of water in the product and to ship that around the world is not economical,” Kirchner said.
That’s not lost on the marketing department, which marks the bottles “Made in the USA,” for customers who might care, he said.
Schwarzkopf’s hair products are made in Ohio and other places.
Hair products are one of the fastest growing consumer products segments with an estimated $38 billion in yearly global sales, including $9.7 billion in the U.S., according to market tracker Euromonitor.
Henkel, founded in 1876 in Germany by Fritz Henkel, bought another German shampoo and hair cosmetic company, Schwarzkopf, in 1995.
The company has yearly sales of about $12.4 billion.
In 1999, Henkel moved into the U.S. hair products market acquiring Dep Corp. and renaming its U.S. hair cosmetic business Schwarzkopf & Dep.
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Henkel’s Irvine Technical Center: has clean room, labs |
Henkel’s Other Irvine Consolidation
Germany’s Henkel KGAA has brought another business to Irvine,the research and development operation of its electronics group.
The company combined operations from Industry, San Diego and Laguna Hills at a 53,000-square-foot facility known as the Irvine Technical Center.
The operation works on adhesives for semiconductor components and serves as headquarters for Hen-kel’s electronics group.
About 75 people work in Irvine, the bulk of them engineers, said Larry Crane, director of research, development and engineering. By year’s end, Henkel expects to ramp up to about 100 people, he said.
“Henkel is investing in the business,” Crane said.
The electronics group is part of Henkel Technologies, which makes adhesives, sealants and surface treatment chemicals. Henkel Technologies’ global sales are about $3.3 billion.
The move to Irvine was an effort to expand from Industry, where manufacturing still is done, Crane said.
“It presents a better image for Henkel,” he said.
The proximity to John Wayne Airport also is an advantage, he said.
“It’s more conducive to our visiting customers,” Crane said.
Henkel counts Irvine chipmaker Broadcom Corp. as a customer, though it’s not its largest, Crane said. Intel Corp., Nokia Corp. and Motorola Inc. are the biggies, he said.
The Irvine building also has a clean room and laboratories in place, he said.
Medennium Inc., a maker of implant lenses for cataract surgergy, moved from the building to a smaller space on 9 Parker Street in Irvine.
This year, Henkel plans to move its Olean, N.Y., research and development facility to Irvine, Crane said.
If it can’t get people to move from Olean, a small rural town, Henkel may have to hire locally, he said.
The most expensive house in Olean is about $400,000, he said.
“You can’t get a garage for that in OC,” Crane said.
,Sherri Cruz
