DSM to sell final citric acid business to Adcuram

By Jess Halliday

- Last updated on GMT

Related tags: Citric acid, Acid

DSM is exiting the citric acid market with an agreement to sell Citrique Belge, its last remaining operation, to Adcuram.

Since DSM closed its citric acid manufacturing plant in Wuxi, China, in early 2009, Citrique Belge, located in Tienen, Belgium, as been its only interest in the market.

Citric acid is used as an acidity regulator and flavour enhancer in soft drinks, fruit juices, sweets, jams and jellies, amongst other use in household products, but Western suppliers have been under pressure for several years, mainly due to overcapacity in supply as Chinese players have entered the market.

For DSM, citric acid became incongruous with its focus in life sciences and material sciences in September 2007, when it first announced that it no longer saw its future in citric acid. The Wuxi closure was prompted by the Chinese government informing DSM that it required the site for urban development.

Under Adcuram, a private German industrial holding company, the business looks set to receive a new injection of investment.

Thomas Probst, a member of the Adcuram Board, said: “With the acquisition of Citrique Belge, we follow our strategy to invest in leading chemical businesses. Also, it shows our commitment to invest outside Germany. We will invest heavily in Citrique Belge to grow the business and to further improve its leading position in the industry.”

Citrique Belge has been operating since 1929 and net sales for the unit were over €100m in 2009. Around 250 employees will transfer to Adcuram on closing of the transaction.

Financial details of the deal have not been disclosed, but it is expected to close in Q4. DSM has said it expects to book a loss of around € 40 m as a result of the transaction.

Related topics: Business, Preservatives and acidulants

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