DSM Boosts China Operations
DSM has agreed to form a joint venture with China’s Nenter & Co., which will give the Dutch chemicals and life sciences company an exclusive supply of vitamin E.
The jv, which will be owned 75% by DSM and 25% by Nenter, will acquire and operate the Chinese group’s vitamin E production facilities in Jingzhou, Hubei province, and will also have a minority stake in Nenter’s other facility in Shishou, Hubei.
DSM will pay about €135 million for its stake in the joint venture, which plans to upgrade and refurbish the facilities and improve operational performance. The Heerlen-headquartered chemical producer said the business will provide it with high-quality and cost-effective access to additional capacity, allowing it to continue to grow organically in vitamin E, which is an essential ingredient in its animal nutrition premix solutions.
The transaction, which remains subject to several regulatory approvals, is expected to close in the second or third quarters of 2019.
Separately, DSM has agreed to increase its shareholding to 75% in Chinese specialty food ingredient producer Yantai Andre Pectin. The Dutch group acquired a 29% stake in 2013 and, having settled a shareholder dispute, has now agreed to buy an additional 46% share for around €150 million. The transaction is expected to close by mid-2019.
The remaining 25% will continue to be held by the Shandong Andre Group, which supplies raw materials and utilities.
DSM said it will work closely with the Andre Group to continuously improve operational performance and ensure a reliable supply of pectin. Located in Yantai, Shandong, Andre Pectin is Asia’s largest producer of apple and citrus pectin – hydrocolloids that provide various functions in food, drink and personal care products.
