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dsm-firmenich to separate its animal nutrition business from the group

Separating Animal Nutrition & Health from the group aims to minimize dsm-firmenich’s exposure to vitamin earnings volatility and reduce capital intensity in line with its long-term strategy.

DSM and Firmenich completed the merge in 2023 to form a nutrition, health, and beauty group. Credits: dsm-firmenich
February 15, 2024

dsm-firmenich started a process to carve out and separate the Animal Nutrition & Health (ANH) business from the rest of the group. ANH is driven by different dynamics from the rest of the group, which has become even more apparent with the unprecedented challenges in the vitamins market. The company believes that the full potential of the ANH business could be best realized through a different ownership structure for which all potential separation options will be considered. The company would expect to be in a position to separate the business in 2025.

Dimitri de Vreeze, CEO of dsm-firmenich, commented, “Our purpose at dsm-firmenich is to bring Progress to Life, as we boost innovation in premium, high-growth and resilient segments. ANH is a fantastic business that over the years we have built to be a true leader in the industry. This is a difficult moment, but we strongly believe that a separation would be better for both businesses and their employees, and ultimately generate better value for all our stakeholders.”

A separation would enable dsm-firmenich to strengthen its position as a world leader in nutrition, health, and beauty. By fully focusing on Perfumery & Beauty (P&B); Taste, Texture & Health (TTH); and Health, Nutrition & Care (HNC), the company can further develop its complementary world-class scientific research, technologies and manufacturing excellence. Full focus on these businesses is expected to enhance their commercial potential and synergies, supporting an attractive and consistent growth outlook alongside robust margins.

The perimeter of the ANH business expected to be separated is being reviewed as part of this process. Given Bovaer’s critical role in reducing emissions across the dairy industry, an important segment for TTH, and Veramaris’ significant potential in dietary supplements, it is expected that both businesses would remain part of the group.

Ivo Lansbergen will continue to lead the ANH business. He joined in 1997 and has led ANH since 2019. “We have an amazing team within ANH that has built a global leader with scale, a unique portfolio and unrivaled innovation capabilities to help our customers tackle some of the most challenging food security issues and with a strategy that is strongly focused on making animal farming sustainable. It is an exciting prospect for our world-class team to pursue our ANH strategy,” Lansbergen said.

ANH is a business with an ingredients portfolio ideally positioned to support a growing population through more sustainable animal farming. Headquartered in Kaiseraugst, last year ANH delivered more than EUR 3 billion in revenues with approximately 6,000 employees. It helps its customers deliver healthy animal proteins efficiently and sustainably while harnessing the power of data to make animal farming practices more sustainable, productive, and transparent. The business has a unique premix network across the world that helps deliver global products with local solutions and benefits from precision services capability.

The global vitamins market has experienced a prolonged downturn which has been driven primarily by unprecedented cyclical pressure on vitamin prices in the animal markets. This has been partly mitigated by strong outcomes from the performance solutions business which provides important tools for farmers to deliver feed efficiency yield management. By separating ANH, dsm-firmenich’s exposure to future vitamin earnings volatility would be reduced.

As part of the vitamin transformation program announced in June 2023, the company continues to make significant progress on its cost reduction plan including plant closures, route-to-market simplification, and optimized service levels. The company remains confident in realizing a contribution of EUR 100 million in adjusted EBITDA in 2024 and the full benefit of EUR 200 million in 2025.

During the process, dsm-firmenich remains committed to the ANH business, its market-leading team and to providing excellent service to customers as the business transitions to a new ownership structure to deliver its full potential.