DSM halts animal grade vitamin A production and reduces vitamin E output
With higher energy costs foreseen this winter, the company has decided to halt manufacture of that feed input.
Rovimix vitamin E-50 production will also be impacted due to the fact it has upstream infrastructure in common with vitamin A.
Existing contractual commitments will be honored, said the producer. “Allocation procedures have been activated across the global production network to enact this in an orderly manner.”
Earlier this month, DSM, citing the escalating energy and transport costs, said it was increasing prices for its vitamin products produced in Europe.
Silvia Sonneveld, VP, essential products, DSM Animal Nutrition and Health (ANH), told this publication:
“Wherever possible, we have absorbed cost increases linked to the energy crisis in Europe. However, as of November 1, we’ve had to introduce a price increase for vitamins produced in Europe to secure future supply as production costs continue to rise.
“In the context of current challenging market conditions, protecting our vitamin production in Europe and, thereby, offering supply optionality for our customers is paramount for securing long-term efficiency, sustainability and food security for our customers, stakeholders, and the planet.
“With energy prices up 80% there will be downward pressures on margins, and we are committed to helping producers optimize feed costs, which make up between 50%-80% of their operating expenses, through our nutrition solutions and technical service support.”
In the past few months, almost all major local producers have announced contingency measures and production curbs.
Adisseo recently announced a temporary shutdown of Dl-methionine production at its Commentry site due to the higher energy and raw material costs, as well as demand stagnation. The supplier has recorded long-term contract cost increases of +26% for propylene, +13% for methanol and +78% for sulphur compared to one year ago.
That player has also put an action plan in place to reduce its vitamin A production level temporarily and to reinforce a cost management approach to its manufacture.
And BASF has initiated a cost savings program as well, with that initiative focused on Europe and Germany, in particular. The program will be implemented in 2023 and will run through to 2024. It targets annual cost savings of €500m, more than half of those to be realized at the Ludwigshafen site.