AlzChem plans IPO to gain bigger foothold in feed additives

By Jane Byrne

- Last updated on GMT

© istock/archix
© istock/archix

Related tags Feed additives Initial public offering

German chemical company, AlzChem, today announced it plans to go public in the first half of this year.

It said is looking to go down the route of an initial public offering (IPO) in the regulated market of the Frankfurt Stock Exchange. 

“AlzChem’s management, the banking consortium Société Générale​ and Baader Bank, all feel confident that a capital increase in the range of €40m to €50m is feasible,”​ said Max Breuer, spokesperson for AlzChem.

He said the company intends to use the IPO as a strategic move to deepen its footprint in the fast growing market for feed additives. 

"The largest part of the proceeds of the €40m to €50m will be used to finance a new production facility at the company’s site in Trostberg, in Germany for specialty chemistry applications such as its feed additive, CreAMINO,"​ said Breuer. 

The company will publish additional details regarding the IPO in due course, he added.  

istock ermetico72 results financial business
AlzChem expects to raise €40m to €50m in IPO © istock/ermetico72

Operations, financial results

AlzChem has four production sites in Germany, a carbide plant in Sweden, a sales subsidiary in the US and a Chinese subsidiary for raw material purchase and Asian sales.

The company’s operating activities are divided into the business segments of specialty chemicals, basics and intermediates, and others and holding.

Specialty chemicals comprises the manufacture and distribution of chemical products for various end markets, including feed additives under the brand CreAMINO.

In the first nine months of 2016, AlzChem reported sales totaled €250.5m (9M/2015: €248.2m). Of this, 51.1% (€128m) was attributable to the specialty chemicals division. In that period, it added, 40.8% of sales were generated in Germany and 59.2% abroad.

Investments in innovations in the specialty chemicals business segment over the last few years have made a clear contribution to the company's profitability, said the firm.

Greater market penetration

The growing world population is driving the growth of the markets for feed additives, claimed AlzChem, with farming land availability increasingly limited, and, thus, efficient agricultural processes and supply security are becoming increasingly important.

“AlzChem is addressing this development with the feed additive CreAMINO, which animals process into the bodily substance creatine, leading to improved feed utilization. This allows agricultural businesses to reduce the total feed volume required. The use of CreAMINO can therefore lead to cost savings on the part of the animal owners and to a general reduction in the ecological footprint of feed production and transport.

“According to Frost & Sullivan, AlzChem was the dominant player and global market leader in the field of creatine-based feed additives as of 2015.

“In the fourth quarter of 2016, the [US] Food and Drug Administration (FDA) granted approval of a petition filed by the company, enabling it to supply CreAMINO for broiler chickens and turkeys in the US. AlzChem is striving for increased market penetration through the approval of CreAMINO for other species and countries,” ​noted the German developer.   

AlzChem also cited over 60 patent families and other intellectual property as critical building blocks for its growth trajectory.

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