DSM enters US$155m joint venture with Nenter to produce vitamin E in China
31 Jan 2019 --- Royal DSM is set to acquire a 75 percent shareholding in a joint venture with Nenter & Co., Inc in in a move aimed at fulfilling the company’s projected needs for vitamin E. The deal is reportedly set to amount to €135 million (US$155 million). The acquisition will include all of Nenter’s production and related assets for vitamin E in China.
The deal will provide DSM with cost-effective access to additional capacity, allowing DSM to continue to grow organically in vitamin E, which is an essential ingredient in its animal nutrition premix solutions, says the company.
Strengthening DSM’s global supply chain footprint, the move will also enable the company to offer locally produced vitamin E in China and Asia Pacific, in addition to its facilities in Switzerland. This will support DSM’s strategic actions to reduce its working capital requirements by simplifying its supply chain.
The joint venture will acquire and operate the vitamin E production facilities in Jingzhou, Hubei, China, and have a minority shareholding in Nenter’s Shishou facility, also in Hubei, China. It will exclusively produce vitamin E for DSM, subject to existing supply agreements of Nenter and there will be a profit share agreement in place between DSM and Nenter.
DSM and Nenter will upgrade and refurbish the facilities and improve the operational performance, to secure a high-quality and sustainable supply of vitamin E, while ensuring compliance with DSM’s safety, health and sustainability standards.
Vitamin E is recognized as nature’s most effective fat-soluble, chain-breaking antioxidant, protecting cellular membranes from being attacked by lipid peroxyl radicals.
Although primarily known as an efficacious biological antioxidant, vitamin E has more benefits, including maintenance of the structural integrity of all tissues and substantial contribution to optimum health and disease resistance of farm animals due to its modulating effects on the immune system, the company notes.
