PRA:  Henkel also posted higher sales in the Asia Pacific market - please explain the market sectors where Henkel expects higher growth and why.

Jan-Dirk: The Asia Pacific is undoubtedly a market experiencing rapid growth - in particular India and China. These markets are characterised not only by strong domestic demand, but also growth-driving trends such as sustainability and innovation.

In Asia Pacific we had record results in Q3 and also our global performance figures confirm that 2010 was the best year in our corporate history so far. In Asia Pacific the overall business in Q3 2010 constituted 15% of Henkel's global business, and compared with Q3 2009, sales rose by nearly 15%, with EBIT up 25.2%.

Currently, we are seeing strong growth in our adhesives sector. Our adhesives are used in everything from automotives, airplanes and construction, to shoes, consumer goods, home appliances, electronics and packaging. We have a well-developed adhesives business sector combining both industrial and consumer products, and as our customers shift their focus to emerging regions like Asia Pacific, we take strategic steps to provide quality support every step of the way.

PRA:  What is Henkel's strategy for market leadership and penetration into new/emerging markets in the Asian region?

Jan-Dirk: Henkel adopts an all-encompassing localised approach driven by a hands-on approach to customers, local R&D centres as well as innovative products specifically catered to local needs in terms of both consumption and environmental concerns.

What we have seen is that there are specific customer needs in Asia Pacific for us to help drive innovation in Asia. We must develop products to meet local needs and we do this by investing in the facilities here today.

For example, in the Chinese railway industry, there has been significant investment by the Chinese government to build up rail systems to connect major cities. We have multiple customers in the railway industry. While our solutions help to make trains quieter, lighter and steadier, this helps our customers to further differentiate themselves in the market.

Henkel has been also pairing R&D operations with leading local research institutions in Japan and China to develop fresh ideas for future innovative product developments and to exchange knowledge of know-how, markets and trends in the fields of chemicals and adhesives.

For example, with Shanghai's Tongji University we created a lab to develop adhesives used for lighter and safer cars. In the future we hope to see a third of our sales come from products less than three years old.

PRA:  Henkel had higher sales in the adhesives sector. Explain the market sectors the adhesives business is targeted at and why?

Jan-Dirk: We refer to adhesives as components that account for only a fraction of total cost, but are nonetheless crucial to the success of the final product. Accordingly, we are constantly broadening our technology portfolio and offer customised solutions based on the demand of our customers.

Beyond its high global growth potential a definitive characteristic of the global adhesives market is its fragmentation, that is to say, while many companies produce adhesives specifically tailored to industrial purposes, few are able to offer a broad portfolio of products spanning both industrial and consumer sectors. Henkel bridges these two sectors and in doing so is able to provide a wide array of different products to a diverse and growing market.

In 2010, all our adhesives business units in Asia Pacific have grown their businesses twice as fast as the markets grew. We have been able to make stronger partnerships with customers and contribute to the development of many different industries by providing advanced technologies and materials faster than the market needs.

PRA:  How is Henkel handling the rising prices of raw materials?

Jan-Dirk: Generally, we devote sizeable amounts of time and energy to increase operational efficiency and productivity. This helps us to offset and displace added costs.

However, when adhesive prices in the industry increase, a product price increase from our side is sometimes unavoidable in order to continue delivering the same high quality of product standards that our customers always expect from us.

PRA:  With sustainability becoming a priority in business practices, how is Henkel positioned for this?

Jan-Dirk: Sustainability has been deeply embedded in Henkel's DNA since many decades. We aim to balance the best possible product quality with environmental protection and social responsibility. For example, our bestseller product Persil was the world's first phosphate-free washing powder (in 1986), thus contributing to the protection of surface waters.

We have grouped all our activities for sustainable development throughout the value chain in five focal areas: energy and climate; water and wastewater; materials and waste; social progress and health and safety for our employees and their communities. For all five areas we set mid and long-term goals regularly and track record it in our annual sustainability reports.

Up to today our sustainability strategy has covered all stages of the value chain, ie. the entire life cycle of Henkel products from R&D to product safety, the sourcing and management of raw material, the manufacturing of our products, logistics and packaging as well as the use and disposal of our products.

PRA:  In your opinion, what are the future industry/global business trends?

Jan-Dirk: Investing in emerging markets is a primary industry focal point. With a growing middle class, regions like China, Brazil, Mexico, Russia and India, have experienced tremendous market growths over the past 20 years, hence our business strategy revolves around meeting the needs of customers and consumers in these regions.

For example, the Asian automotive industry has experienced tremendous growth, particularly in Korea and China. Hence, in July 2010, we opened a new automotive factory in Eumseong, Korea, which underscores our confidence and commitment to Korea. This facility is one-of-a-kind, specialising in solutions to reduce noise, vibration and harshness (NVH) for international automakers.

Innovative and sustainable development is another key industry trend and an important driver of growth. We spend up to EUR400 million a year globally on R&D towards driving new and innovative products as well as solutions that contribute to a lower cost structure for our customers and a sustainable development.

PRA: How will Henkel embrace this path of innovation?

Jan-Dirk: A key focus of our innovation ambitions is our local focus for both B2B and B2C customers, which enables us to create higher-quality products that better suit local customer needs. A crucial pillar of this approach has been investing in R&D and production facilities to the areas that we serve. We have expanded our research department at the Asia Pacific headquarter in Shanghai in 2010, thus increasing its support for all strategic business units across the region.

Another progressive example of driving innovation by local needs can be found in our Technomelt Supra Cool 130 adhesive innovation that helps reduce energy costs in production by 30%, and furthermore reduces traditional production consumption rates by 35%. In a time when customers were feeling the burden of the recent global economic malaise, this innovation enabled Henkel to provide its customers with an environmentally friendly, progressive, sustainable and superior product - at a reduced cost.

Furthermore, as one of the first adhesives companies to embrace the possibilities of alternative energy, we are pioneering new energy sectors such as solar and wind power energy as well as new energy vehicles. One of our recent achievements is the development of bonding and sealing solutions for fuel cell and "green" cars such as hydrogen fuel cell vehicles that cause zero emission.