It is a great pleasure for me to have the opportunity to address a subject close to my heart—my opinion of the future of our industry.
Economists predict a solid future. Using the actual figures for the year 1990 as the base for forecasting future growth, the flavor compound and essential oils business worldwide should grow from $4.5 billion to $7.5 billion by the year 2000. This corresponds to an average growth rate of somewhere between 5 and 6% in value. The average compounded growth rate during the past four years has been expressed at 8.5% in US dollars, which corresponds to about 6% excluding the fluctuations against other major currencies. In fact, the growth rate in US dollars will he heavily influenced by exchange rate fluctuations. Only about one-third of the world potential refers to the dollar area. Therefore, world growth is usually higher in years with a weak dollar and lower in years with a strong dollar. However, since I am not here to predict the dollar movement, the calculation excludes currency fluctuations. The question is now whether these forecasts are realistic or whether we can even expect a better future. I would like to share here my thoughts on the possible future developments in our business.
Generally speaking, industry growth is directfy related to:
type of industry