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Danisco restructures to be "first choice": Knutzen

By Stephen Daniells , 21-Aug-2008
Last updated on 22-Aug-2008 at 16:43 GMT

A decade of structural changes have helped Danisco position itself as “first choice” for customers, suppliers, business partners and employers, its chairman has said.

Ingredients, both health-promoting and general food ingredients, are where the company sees a bright future, and the quest to succeed could well lead to acquisitions, Tom Knutzen told the company’s annual general meeting.

The offloading of Danisco Sugar to Nordzucker was a “huge decision” and “a historic step” for Danisco, he said. The company announced in July that it will its sugar division to Nordzucker for DKK5600m, around €751m.

“For a long time, the board of directors has been aware that the two very different business models of ingredients and sugar, respectively, were not an optimal combination,” Knutzen said in his report.

“With these words, the Board of Directors asks the Annual General Meeting for a mandate to close the sale of Danisco Sugar to German-based Nordzucker.

“If the Annual General Meeting rejects the proposal, the Board of Directors will consider it a mandate to work towards an independent stock exchange listing or other alternatives,” he added.

Focus on ingredients

Knutzen said that, now Danisco has said goodbye to sugar, the company is determined to become the customer’s preferred choice.

“We are working hard to become a market-driven organisation through-and-through by, for example, optimising and motivating our sales force so that Danisco is at the top of relevant customers’ minds.

We want to be the company with the strongest innovation team. The innovative company which others want to cooperate with. And finally, we want to be leading in sustainable production and products,” he said.

Key to the company’s future will be health and nutrition ingredients, said Knutzen. The company will be targeting ingredients with benefits for digestion, diabetes, cardiovascular health, oral hygiene, and immune health, he said.

“We already have products in all those areas today, but we want to be among the three largest and best in the world. This requires an effort and could also involve acquisitions. We are determined to be in the top three, because we know that it is a market with solid growth rates,” said Knutzen.

Getting in on the biofuel market

Knutzen also highlighted the DKK 350 million (€47 million) partnership with DuPont for the production of biofuels as a key move by the company.

“DuPont has the expertise, we don’t have, and we have what DuPont doesn’t have. Together, we form a partnership that will end up in a sustainable product based on residue from for instance agriculture or forestry,” said Knutzen.

“Each party is initially investing up to DKK 350 million over the next three years. That is a lot of money, but just listen to this: We foresee a market for second-generation bioethanol of at least USD 75 billion in 2020, corresponding to around DKK 400 billion.

“We aim to be a key player in this market and to have a big slice of the cake,” he said.

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