Alain Khaiat: Stronger together

Alain Khaiat, an active leader in South-east Asia’s cosmetics industry, says a close-knit community where the big boys uplift smaller players is key for the industry’s prosperity and survival

Please tell me about the core work of the Cosmetic, Toiletry and Fragrance Association of Singapore (CTFAS) and the ASEAN Cosmetics Associations (ACA).
CTFAS was founded in 1991 to bring industry players together to harmonise the cosmetics regulations within South-east Asia. ACA was founded for the same purpose. It is an association of associations. The founding members of ACA were Singapore, Malaysia, Indonesia, Thailand and the Philippines. Vietnam joined us two or three years ago, and we are waiting for Myanmar to be ready. We hope to have representation from all 10 ASEAN member countries.

The formation of ACA led to establishment of the ASEAN Cosmetic Directive (ACD). ACA has been instrumental in bringing the industry and regulators together to discuss the various ways to move forward and to create a unified cosmetics regulation that would allow products to go from one country to another.

What is your role in both associations?
CTFAS is staffed by volunteers. I was asked to volunteer for CTFAS presidency in 2001 and have not been able to pass the baton to anyone else since (laughs).

ACA leadership, on the other hand, is by rotation. The country association becomes the chairman of ACA for a period of two years, by reverse alphabetical order. The local association head can choose to chair ACA himself, or nominate someone else from his association to that position. Because I think it is good to have an Asian face to represent ASEAN in front of the regulators, I nominated Le Chau Giang as ACA president in the last Singapore term.

Was standard setting the main reason for the formation of both associations?
It was, and we are beyond that now. Today, we spend a lot of time training our members on how to implement standards and abide by regulations. We also participate in tradeshows where we promote some of the companies we bring along.

I assume these are more SMEs than established players.
You are right. The big boys know what to do, they don’t need ACA or CTFAS. That said, there is a valuable relationship between the big and small players. They help by being the trainer. It is very important to have both working together for the benefit of the industry.

Does ACA act as the voice for the region’s industry on a global level?
We do. There is the International Association Collaboration, which covers all industry associations around the world. We attend the IAC meeting twice a year – and soon to be three times a year – to represent ASEAN. In between meetings there are projects which we participate in to contribute to the discussion. The end objective is to have a statement on a topic that matters to us, for example, plastics in the environment.

As an industry association, we ask our members to voluntarily eliminate plastic microbeads from their cosmetic products. That has been in place for three years. The last time I checked, 95 per cent have been removed globally. Today we are close to 100 per cent.

You said earlier that both associations have passed the stage of setting standards, but it seems to be very much part of what you do today.
Countries are always issuing new regulations. For example, by 2025, all cosmetic products heading into Indonesia must be certified whether they are Halal or not.

Companies must be prepared for this. We had the head of the Halal agency from Indonesia to come and talk to our members about the progress of this new regulation and what the agency’s stand is on it.

Is the Indonesian market important?
It is a country of 265 million people but there are only about 20 million people in the upper income bracket, and 20 to perhaps 50 million people with purchasing power. These people are concentrated in just five cities.

While Indonesia is not yet the market everybody is talking about, it is growing and may become a big market in South-east Asia one day.

In South-east Asia, the biggest market in terms of spending per capita is Singapore – four times bigger than number two, Thailand – although the population of the city-state is just 5.5 million. Singapore represents seven per cent of total sales in South-east Asia, equivalent to a market of 15 million people!

Where did all those people come from, you wonder? Some like to shop for cosmetic products in Singapore because they know that they are not going to find counterfeits here.
The time to place a cosmetic product in Singapore is extremely short – just a few minutes. In Indonesia it can take a company up to six months due to lengthy regulation checks. So, a consumer who wants the latest cosmetics will find them all in Singapore.

Every year, some 60,000 new cosmetics, toiletries and fragrances are placed on the market in Singapore. That’s about 200 new products a day. The average lifespan of a product is about two years.

So a new mascara launched by a company will be replaced with a new one after two years?
More or less. Some products are meant to last much longer because they have no reason to change. I used to work for Johnson & Johnson. Some products have been there forever! Baby powder was launched in 1893, and it is still there. Of course, there are new variants (such as scented versions) and the original has had some changes due to new regulations. It is common for product formula to change over time due to ingredients that have become banned, restricted or hard to source.

Are there scientific members who bring attention to ingredients that require a second look?
The ASEAN Cosmetics Committee (ACC), formed by delegations of the 10 member countries plus ACA and the ASEAN Secretariat, is tasked with making decisions on regulations and the adaptation of the ACD. It also looks at how to better train regulators.
The ACC went on to establish the ASEAN Cosmetics Scientific Body (ACSB). I represent Singapore in the ACSB, and in the country delegation there are members from the industry, the academe and regulators. The objective of the ACSB is to evaluate ingredients based on new technology and new scientific results. It also looks into the process of determining the safety of ingredients.

Before, we looked at an ingredient in one product. Now, we look at the same ingredient that is used in all products. Some ingredients are safe when used in just one product but not in 20 different (complementary) products. If the consumer were to use those 20 products every day, the exposure could be dangerous. Such a probability is low but we take the worst case scenario to be safe. In such cases, we may allow use of the ingredient in just 10 complementary products, or reduce concentration across the board.
Our work to ensure consumer safety is extremely important. That’s why many of the MNCs are allowing their people to conduct trainings for the industry. It is the whole industry at stake.

Some companies are very small, with just two or three people who may not have scientific background. Somebody has to guide them on how to stay within regulations and educate them on why safety is important.

How do you ensure small, new companies can get all the training they need?
Membership fees for CTFAS are extremely low, S$380 per year, so that there is maximum engagement. Members attend free quarterly meetings that feature valuable speakers such as Euromonitor researchers who present trends, technical presentations and demonstrations of how products are made. We also answer any questions members have about processes or ingredients, as long as they are general in nature. When questions become too specific about their product, we direct them to consultants who can help them for a fee.

What’s your membership composition?
CTFAS members are suppliers, consultants, retailers, manufacturers and others across the whole spectrum, with SMEs making up 30 per cent of the community.

The SME composition varies across the region. In Indonesia there are more micro companies – outfits with just five people making products to sell only in their kampong.
At ACA, SMEs make up half of the regional membership. It also has associate members that are associations from outside of South-east Asia. They get access to information that is important for their members, while we get to have a global dialogue.

With such a diverse composition, is it hard to determine what to offer your members?
Not really. We always ask our members what they want. SME members usually want education on regulation, safety processes and claims – how can they claim to offer a certain benefit through their product and prove that claim. We then build our workshops around these needs.

Our big members simply want to be speakers and trainers.

What else worries and excites your industry peers?
Changing consumer habits is our biggest challenge. Today, many products are bought off the Internet. We had Lazada and Facebook tackle this at our ACA Leaders Forum in July. This presents a challenge for regulators. How do they control what products are sold? They could control if the products originated from a warehouse in Singapore, but that is not always the case.

Consumers are also becoming more environmentally conscious, wanting more natural ingredients, less environmental footprint, etc. However, there are factors to consider in the replacement of what seems to be less environmentally-friendly. For instance, many consumers today want palm oil (as production damages peatland, which increases global greenhouse gas emissions) to be replaced by olive oil. One hectare of olive tree is needed to yield the same amount of oil from one palm tree, so it is not possible. However, it is possible to support responsible palm oil sources that do not cause deforestation.
So these are things that we need to communicate to consumers.

Lastly, tell me how your recent ACA Leaders Forum went.
The 2019 edition is our fourth. We had 85 attendees. We would have liked to see more attendees from outside of Singapore; 90 per cent were from Singapore. What I’ve learnt is that the mid-July event date was not ideal because many Caucasians would go on vacation then. Furthermore, companies have budget constraints and Singapore isn’t a cheap destination.

This time, we brought in a social benefit. We donated S$10,000 to Duke-NUS Medical School and NUH-Singhealth to fund a project on Asian Women Breast Disease. It started with CTFAS donating S$30,000 from its own fund to the project last year.

 

This article was first published in TTGassociations October 2019

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