Orafti to pass on escalating costs for Beneo
ingredients in response to increasing raw material and energy costs
- a measure it says it has tried to stave off as long as possible
but which is now inevitable.
High energy costs have plagued companies at all levels of the food industry for the past two years. Not only do they have a direct impact on the running costs of a production facility, but they have proved the catalyst for shifts in land use to accommodate demand for biofuels. This, in turn, has had a knock-on effect on raw material prices. Orafti has said that although it has tried to counter high prices with efficiency increases, sustained escalation means it can no longer absorb them internally. As of October 1 it is increasing the price of its liquid ingredients by six per cent, and powdered products by eight per cent. The price increase is the first for the Beneo branded products in three years. "We are aware of the impact that the price increase will have for our customers," said managing direct and head of sales and marketing Dominique Speleers. "However the rising raw material and energy costs have made it impossible for Orafti to hold prices for yet another year." In May the company announced a restructuring of management to bring it closer to its mother company Sudzucker - especially with a view to finding synergises in the Speciality division. A core angle for Orafti's Beneo inulin and oligofructose from chicory roots is their prebiotic properties - that is, helping to create a favourable environment in the gut for probiotic bacteria to thrive. They have also been marketed with an emphasis on improving satiety, and research has indicated that they could aid calcium absorption, thus having a part in optimal bone health. Moreover, they can be used in products positioned on a better-for-you platform with less sugar and fat in the formulation. This is an area that the company is particularly addressing at present, with the impending launch of its Beneo HIS Ultra at the Food Ingredients Europe trade show in London next month. This ingredient is an upgrade from the regular Beneo HSI product, and is the same but for containing four per cent small sugars (glucose, fructose and sucrose), as opposed to 14 per cent of the regular version. This Beneo HSI Ultra is therefore suitable for customers for which low sugar content is critical, and for which inulin solubility is key - such as confectionery and fruit preparation, a spokesperson for the company said. Since April 2006 Orafti has had a new production plant in Pemuco, Chile, which complements production at its original plant in Oreye, Belgium, and allows the company to assure its customers of supply security.