DSM sees weak demand in China, depressed vitamin prices

By Jane Byrne

- Last updated on GMT

© GettyImages/RBFried
© GettyImages/RBFried

Related tags Dsm vitamin A

DSM notes continued low vitamin prices, higher input costs and soft demand in China in a Q1 2023 trading update today.

The Dutch company reported that its health, nutrition, and bioscience division delivered sales of €1,875m, with organic sales down 7% and adjusted EBITDA of €302m (US$331.52m), a decline of 23%.

Its animal nutrition and health business “experienced exception conditions.”

Geraldine Matchett and Dimitri de Vreeze, Co-CEOs of DSM, commented: "Our first quarter results are reported against a comparable period that had not yet been impacted by the high rate of global inflation, the effects of which remained elevated into 2023. Low vitamin prices, especially vitamin A, have also remained, despite resilient end-user demand. In this environment, our focus across businesses remains on pricing actions and prioritizing profitability over sales volumes. This approach has supported our margins, which improved sequentially into the first quarter of this year.”

The DSM leads do not foresee a significant improvement in those conditions in the second quarter.

However, they anticipate a stronger second half of the year across all businesses as inflationary pressure eases, as volumes recover, especially in China, and vitamin prices start to normalize.

The company is set to provide an outlook for the remainder of 2023 at the publication of its half year results at the beginning of August.

Pet food plant 

DSM also announced plans yesterday to build a next-generation nutritional premix plant in Tonganoxie, Kansas, creating 28 jobs, as per the website of the Kansas Department of Commerce.

The plant is expected to break ground in July 2023 and to be fully operational by early 2025. It will be strategically located in the KC Animal Health Corridor, close to many pet food manufacturers.  

The facility will feature precision micro-batching capability, allowing for precise automated micro-addition of numerous ingredients to premixes in a fully traceable manner, said DSM.

Increased process automation of the plant will allow for greater traceability, accuracy, and automated weight verification, as each batch moves in its own containerized transport system in an automated manner through the facility.  

The plant will be designed with sustainability in mind; its automated mixing vessels will reduce waste by decreasing flushes necessary for sequencing and will operate on 100% renewable electricity.

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