dsm-firmenich to separate its animal nutrition and health business from rest of group

The company said it believes that the full potential of the ANH business could be best realized through a different ownership structure. “All potential separation options will be considered.”

It plans to separate out the ANH unit over the course of the next year. It said the move will minimize its exposure to vitamins earnings volatility​​.

“The ANH unit is also operating in a more capital intensive segment than our other three business units,” noted a spokesperson. 

As part of the vitamin transformation program announced in June last year​​ dsm-firmenich said it is continuing to make considerable 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 €100m in adjusted EBITDA in 2024 and the full benefit of €200m in 2025.”

It is likely though that the Bovaer and Veramaris businesses will be retained within the wider group as they are a “strong fit” and “have synergies” with the core human nutrition activities, according to the spokesperson. 

“Bovaer is a sustainability enabler for the dairy industry, which is an important segment in our taste, texture and health (TTH) business. Veramaris is the algae-based omega, for which dietary supplements (health, nutrition and care) and pet food (TTH) are strong growth markets.”

‘A logical outcome’

“This carve-out is a substantial structural step for the company and its culture, but one logical outcome of the strategic asset review announced earlier in second quarter of 2023. It follows the merger of the high margin specialty business of Firmenich with the portfolio of DSM, which combines both specialties across the full life-sciences verticals and high-volume, low margin businesses such as ANH.