Based in the UK, Croda is a specialty chemical company that uses renewable, natural sources for 65% of its raw materials. It remains a key holding across our international portfolios. Its Consumer Care business develops ingredients for personal care, agricultural, and health care products. The Performance Technologies division supplies polymers, lubricants, and coatings to mostly industrial customers.
Croda delivers highly customized chemical products by leveraging its direct sales force, technical expertise, and worldwide production. The company’s ingredients are critical components but account for a fraction of the cost of its customers’ final products. Management’s focus on small volume, high value products, especially for the personal care industry, should help expand profit margins over time. Croda's natural ingredient sourcing specialization should foster growth due to increased attention to health and sustainability.
Croda incorporates product stewardship principles, including green chemistry, into the design and development of all new products. In our view, Croda's strong competitive position, targeted strategy, and attractive market niche make its valuation look compelling.