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DSM sells division to focus on value-added ingredients

By Anthony Fletcher , 15-Jun-2006

DSM Food Specialties' sale of its Engevita inactive dry yeast business is part of the group's strategy of focusing on added value yeast extracts and other flavour ingredients.

The deal, which was completed on 31 May, means that Lallemand will take over the division from the savoury ingredients business unit of DSM Food Specialties.

The acquisition includes the transfer of the Engevita trademark, all stocks plus application and production knowledge as well as production equipment.

 

The sale of Engevita is part of the Savoury Ingredients business unit's strategic development of focusing on the manufacture of yeast extracts, process flavours for specific taste directions and natural taste enhancers.

 

The firm's recently extended Savorkey range is a good example. DSM claims that this range offers uniform particle sizes and neutral colours, and can contribute positively to efficient processing and final product appearance.

 

The company says that the range also has excellent solubility, high stability during processing and less turbidity compared to many animal proteins.

 

In addition, a new process flavour facility in China highlights the units focus on delivering these products on a global scale. Although Europe still dominates the manufacture of flavours, Asia is beginning to catch up.

 

Indeed, the market for flavours has, historically, been dominated by suppliers from the US, Japan and Western Europe - in particular, France, the UK, Germany and Switzerland. However these traditional flavour production areas could begin to lose market share to developing areas of the world as the product range and demand expands.

 

According to a recent report from Freedonia, China leads the way in spurring growth in Asia Pacific, a region slated to advance at about 7.3 per cent, year on year, until 2008. This compares to Western Europe and the US with 3.7 and 3.3 per cent growth respectively.

 

As for Engevita, DSM Food Specialties says that it will continue to manufacture products at its Delft facility over the coming months on behalf of the Lallemand group.

 

After this transitional period, the Engevita plant will be relocated to a Lallemand yeast production site near Tallinn, Estonia. This plant is already manufacturing similar yeast-based products that are also primarily grown on beet molasses, for the global market.

 

Following the transfer of the equipment and buildings, this Lallemand site will focus exclusively on the production and supply of inactive yeast speciality products.

 

Lallemand is a privately held Canadian company specialising in the development, production, and marketing of yeasts and bacteria. The company has four major divisions: North American Bakers Yeast and Ingredients (based in Chicago, USA), European Yeast (based in Vienna, Austria), Rymco Africa (based in Johannesburg) and Specialty (based in Toulouse, France).

 

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