Scents make sense for P&G

Donald Saltz

September 06, 1991|By Donald Saltz

Procter & Gamble, one of the world's leading consumer products companies, is expanding its cosmetics and fragrances business at a rapid rate and will center that segment of its business in Maryland.

Cosmetics and fragrance products generally provide higher profits than foods.

P&G's growth in the personal care sector was accelerated by its mid-1980s acquisition of the Richardson-Vicks drug business. The purchase, a company spokesman noted, made P&G "the largest over-the-counter drug maker in the world."

In late 1989, Cincinnati-based P&G paid $1.3 billion for the Noxell Corp. of Maryland, the rapidly growing maker of moderately priced Cover Girl, Clarion and Noxzema products. In July P&G spent another $1 billion-plus to buy Revlon's Max Factor and Betrix of Germany.

Procter & Gamble had sales in the year ended June 30 of $27 billion, a full half -- $13.5 billion -- derived from personal care lines. Overall, the company's well-known brands include Crisco, Folger's, Citrus Hill, Jif, Ivory Soap, Camay, Cheer, Tide, Bounty, White Cloud, Pampers, Oil of Olay, Crest and Head & Shoulders.

The company doesn't break down sales or profits achieved by products or even divisions, but the spokesman noted that in its last year as an independent company, Noxell had sales of $522 million. Noxell-product sales have grown but the rate of increase isn't reported.

However, Noxell and its Hunt Valley facilities are home base for P&G's total cosmetics and fragrances business, which includes

the very successful Navy fragrances for women, a solid No. 3 in most markets, the company spokesman said. Also under the banner are California for Men and California for Women fragrances.

P&G is phasing out its Max Factor operations in Los Angeles and intends to move personnel from that city to Hunt Valley by next April. As many as 125 Max Factor employees will join the 1,800 people currently working at Noxell in Hunt Valley. An additional 325 sales people will report to the Hunt Valley office. Consistent expansion is expected at Hunt Valley as P&G becomes more involved in cosmetics and fragrances.

Also in Baltimore are another 250 employees of P&G's industrial chemicals plant, where the company makes Ivory Liquid, Joy, Dawn and glycerin. The Nicholson Street plant dates to 1930.

Ivory Soap, Procter & Gamble's best-known product, dates back much further, to 1879 when it was introduced. P&G didn't claim perfection for Ivory, such as absolute purity, claiming only that it was "99 and / percent pure." The soap's floating quality was created when a workman forgot to turn off the stirring machine during lunchtime, thus adding in more air.

Noxell -- the Noxzema Chemical Co. in its earlier years -- began in 1917 as a seller of Noxzema skin cream, invented by Baltimore pharmacist George Bunting. The Cover Girl line came along in 1961. The company remained under the Bunting family's guidance and control until it was sold to Procter & Gamble.

P&G's purchase of Noxell has not only increased P&G's representation in Baltimore, but it brought a lot of Marylanders into the fold as P&G stockholders. The purchase of Noxell was for an exchange of stock, and a large majority of those former Noxell shareholders have held on to the P&G shares. They have grown in value, although moderately, in the couple of years since the acquisition.

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