Acquisition strengthens DSM enzyme activities

By Laura Crowley

- Last updated on GMT

Related tags Dsm Dsm food specialities Enzyme

DSM hopes to improve its international food enzymes activities
through the acquisition of the business and all the assets of
Valley Research, an American biotechnology company.

Valley Research, founded in 1984, is privately-owned and offers a broad range of enzymes for use in dairy, juices, wines and dietary supplements.

The terms of the acquisition have not been disclosed.

"The food enzymes market is very important to DSM, and one in which we have a strong global position," said Alexander Wessels, business group director for DSM Food Specialities.

Although the deal will boost global expertise, he added: "This acquisition is a valuable addition to our company and strengthens us in servicing our customers even better by offering regional blending and solution providing platforms."

DSM Valley Research The newly formed DSM Valley Research will operate as a separate body within DSM Food Specialities, with the hope that this will ensure a smoother transition for Valley Research customers while opening new doors for innovation at DSM.

Art Sears, president of Valley Research, said: "By joining DSM, we are convinced we have chosen the best company to take our know-how and products to the next level, assuring uninterrupted service for our customers and a new platform for further growth."

DSM's 2007 financial results showed that its Food Specialties' sales and operating profit decreased due to the contractual phasing-out of the phytase tolling business in 2006.

However, it strengthened its position through increased innovation, with the launch of new products while pursuing organic growth.

Enzyme sales showed strong growth, especially in the area of baking, brewing and fruit processing.

Among its enzymes launched in 2007, DSM introduced PreventAse, an acrylamide-reducing enzyme derived from Aspergillus niger .

It was launched the same week as Novozyme's acrylamide-reducing enzyme Acrylaway CakeZyme and Let's Cake Together were launched for the baking industry to help manufacturers respond to the demands for indulgence, reduced fat and improved costs.

Meanwhile, DSM also introduced two new enzymes and a yeast mannoprotein in the fruit processing and wine industry.

It also introduced Tensguard, a new non-fat hydrolysate consisting of bioactive peptides targeting the growing global market for blood-pressure management.

Enzymes demand Enzymes are generally derived from fungal and bacterial organisms, although sometimes from plant sources, and are used to speed up or slow down chemical reactions.

Global demand for food enzymes has increased as a result of spiralling raw material prices because of their ability to help save costs, according to a recent report by the Freedonia Group.

It found that demand for enzymes on the whole will increase in demand by 6 percent between 2007 and 2012.

While enzymes will continue to play an important role in cheese and beer production, it said demand for food enzymes will increase fastest in the bakery sector and areas such as oilseed processing.

Stephan Tanda, from the DSM managing board, said: "Our sales in food enzymes have shown strong growth in recent years.

It remains a very interesting growth area for DSM and is one of the ingredients in reaching our targets as set out in Vision 2010 - Building on Strengths."

The strategy is aimed at building on the foundation of the current Vision 2005 programme, which focused on directing DSM's portfolio to specialty life science and performance material products and more stable and higher earnings were realised.

The new strategy programme focuses on accelerating profitable and innovative growth of DSM's specialties portfolio.

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