DSM sheds yeast business in nutrition focus

Related tags Bakery ingredients Nutrition Dsm

Dutch food and pharma group DSM completes the last step in shedding
its bakery portfolio, selling its stake in the South African yeast
products manufacturer Rymco,writes Lindsey Partos.

The firm will sell its 50 per cent share interest in the yeast supplier to its joint venture partner Daniel Mills & Sons. The share transfer for DSM amounts to €39 million.

"This is the last remaining move to divest ourselves of the bakery ingredients business,"​ a spokesperson for DSM tells FoodNavigator.com.

Identified as a key strategy for growth, the largest fermentation company in the world has clear ambitions to concentrate on products with health boosting functionalities (health enhancing, adding nutritional value) than those provided by bakery ingredients, currently witnessing sluggish growth.

And as functional food ingredients become more popular, DSM is set to benefit from its position between food and pharma.

The sale of the yeast business, that brought in €31.5 million in annual turnover for the firm, follows hot on the heels of the extensive bakery ingredients sell off earlier this year.

In a €197.5 million deal, the firm shed all the activities of its DSM Bakery Ingredients business, with the exception of the Baking Enzymes unit, to private equity firm Gilde.

"These [health] trends limit the operational and technological synergies between DSM Bakery Ingredients and the core of DSM's food and nutrition businesses,"​said the Heerlen-based in April this year.

DSM's​ low growth, low profitability bakery unit brought about 4.5 per cent of sales (€350 million) to the group's overall €7.75 billion turnover last year.

But the unit, employing about 1300 people, is still the number three world player in bakery ingredients, supplying yeasts and bread improvers.

Reporting on 2004 figures in March, DSM said sales at its food speciality unit - that sells dairy, savoury, beverage and nutritional ingredients - had risen by about 10 per cent.

At a wisp of 2.8 per cent growth, bakery ingredients fell below the global ingredients market, currently growing at about 4 per cent.

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