Danisco pledges research, acquisitions in healthy ingredients
ingredients offering in areas in which it is not a market leader,
as it positions to for a bio-based future.
In its full year 2007/8 results, released yesterday, Danisco said it believes health and nutrition will continue to be a key driver for ingredients, and it is already seeing more demand from customers for functional ingredients that safeguard health. It boasts a focused offering in this area at the moment, including xylitol sweeteners and probiotic cultures, while the global market for bioactives includes demand for commodities like vitamins and herbal extracts. "It will be a future focus for us to further strengthen and broaden our health and nutrition portfolio into value-adding areas where we do not yet hold a market leading position," said Danisco. "This will happen through increased research efforts into new applications for our current ingredients and development of new products, as well as through bolt-on acquisitions where we can leverage on our existing distribution platform." No timescale was given for this drive, but Danisco is predicting that, in 20 years time, we will be living in a bio-based economy. This outlook has implications not only for food ingredients, but also for Danisco's Genencor division, which in the last year formed a collaboration with DuPont to develop second generation biofuels that do not use food products as sources. The past year has been one of major transformation in which the Danish group sold its flavours business to Firmenich, and has been moving towards exiting the sugar market, either through selling its sugar division or through spinning it off into a separately listed company. Danisco also re-jigged its ingredients structure, which took form as of Q1 2008/9. Under this new structure, Food Ingredients is divided into Enablers and BioActives. Enablers are sub-divided into the emulsifiers division and the gums and systems division. Bio Actives are subdivided into the sweeteners division and the cultures division. For full year 2007/8, Danisco's food ingredients operations brought in revenue of DKK 8565m (€1148.4m), of which DKK 3431m (€461m) came from Bio Actives and DKK 5134m (€688.4) from Enablers. Across the board, Danisco reported full year revenue of DKK18778m (€2517.4) for the year, compared to DKK 18802m (€2521m) for the year before. EBITDA before special items was DKK 3198m (€428.8m), compared to DKK 3078m (€412.7m). As with most companies in the food sector, Danisco has been feeling the pinch of increasing raw material prices. Knutzen called the near double increase in costs for vegetable oils and energy "an unprecedented development in the history of Danisco". Although this resulted in the passing on of some costs to customers, this is of a general story in agricultural materials. "More than ever, our knowledge and solutions help our customers counter these challenges," said Knutzen. "We will continue to address these challenges through bio-based and sustainable innovation in both food ingredients and enzyme applications."
