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French yeast leader expands production in US

18-Feb-2004

French yeast giant Lesaffre is driving deeper into the US market, announcing a link up this week with crop processing titan Archer Daniels Midland to break ground on a new yeast plant in the US.

Coming together in a new joint venture called Red Star Yeast - named after the US yeast company Lesaffre bought in 2000 - the two companies said construction on the new plant next to a current ADM corn refinery will begin next month if funding from the local government is cleared.

"Since acquiring Red Star Yeast from Universal Foods we have been analysing opportunities to better serve the baking industry in North America and to provide a platform for future growth. We believe that our new venture combines the strengths of both partners to best serve the customer," said Lucien Lesaffre, chairman of Lesaffre.

 

The new synergy between the French and American companies is born from the growing use of corn derivatives as a yeast food. Corn refiners such as ADM produce high fructose corn syrup, glucose, dextrose, starch and the majority of the fuel and beverage alcohol from corn. The sugar dextrose, used to sweeten products like chewing gum, has also proved to be a good food for yeast to grow on during fermentation. Recently dextrose has gained importance in other fermentation applications, as a yeast food in brewing low calorie beers and in baking, another major market where dextrose serves as a yeast food.

 

In 2000 the French firm, a leader in the €400 million North American yeast market, made inroads into the US yeast market by acquiring the Red Star Yeast business - with sales of $140 million in 2000 - from the colours company Universal Foods for $125 million. At the time, Red Star Yeast was the largest North American supplier of yeast to the commercial bakery market.

 

The agreement announced this week with $30 billion plus processing giant ADM is set to crank up capacity for the yeast firm.

 

"The combination of ADM's production assets and corn syrup capacity in coordination with Lesaffre's world leading technology in yeast makes us optimistic about the future of our venture. In addition, we will have another supply channel providing grind allocation flexibility in our system of corn wet milling plants," said G. Allen Andreas, chairman and chief executive of ADM.

 

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