Danisco raises US prices for brewing enzymes

By Lorraine Heller

- Last updated on GMT

Related tags: Raw material, Danisco, Enzyme, Starch

Danish group Danisco has become the latest in a string of
ingredients firms to pass on increased raw material and energy
costs to the market, announcing today that it is to up the mark on
its glucoamylase for the US brewing and portable alcohol markets.

Effective January 1 2007, the increases will be implemented across the firm's Diazyme brewing enzyme product range.

According to Danisco, the increases of 10-12 percent are necessary as the company has found it "impossible"​ to recover soaring raw material and energy costs in an already highly optimized manufacturing system.

And the firm is not alone to be squeezed by increasingly tight market pressures.

In recent months, other major food ingredients firms that have hiked their prices include CP Kelco, FMC Biopolymer, BASF, Novozymes, Cargill, National Starch, DSM and Jungbunzlauer. These price increases affect a wide range of products, including gums, starches, citric acid, vitamins and enzymes.

Danisco has said that its latest price increases, announced to customers this month, will not affect existing supply contracts.

For the time being, the price hikes only affect the US market.

"This is a significant part of our business, and in order to make it sustainable we had to have these increases. We decided that raising prices in the US is most pertinent right now, and for the time being we are unlikely to see increases in Europe,"​ Danisco's Lars Obel told FoodNavigator-USA.com.

Glucoamylase, also known as amyloglucosidase, is an enzyme used predominantly in making low-carb beers, and is used to cut off glucose from starch during the manufacturing process.

Sales of these enzymes currently make up around 20 percent of Danisco's brewing business.

In August, the Danish firm revealed a strong annual performance, which was nevertheless impacted by a number of issues, including its takeover of Genencor International, the EU sugar reform and rising raw material prices.

However, the company said that acquisitive activity should ensure that the group starts the new financial year in a strong position.

"The rising energy and raw material prices have produced a new challenge for Danisco as the market situation makes it hard to fully offset rising costs by price increases,"​ said CEO Tom Knutzen at the time.

"This will put greater demands on Danisco's innovation capabilities and business process efficiencies going forward. Danisco's organization must therefore be able to effectively adjust to the ever more changeable trading conditions while maintaining a high level of competitive power."

Overall, the company recorded revenue of DKK 20,912m ($3,584m) in the 2005/06 financial year, up 17 per cent on the prior year.

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