DSM’s to Invest $30 Million in Canadian Omega 3 Facility, Confident on Market Outlook

27 Aug 2014 --- DSM’s decision to invest $30 million in its omega-3 production facility in Nova Scotia demonstrates market leadership and confidence in the long-term potential of this market, as well as commitment to the community. DSM Nutritional Products announced this week that it will invest at least $30 million in new capital to upgrade and expand its facilities in Mulgrave, Nova Scotia, building upon its earlier investments in the nutritional lipids category through the acquisition of Ocean Nutrition Canada and Martek Biosciences Corporation, both major manufacturers of healthy omega-3 oils.

DSM acquired Ocean Nutrition in 2012 and has become one of Nova Scotia's largest employers in the life sciences industry. The decision to increase its presence in Nova Scotia resulted in part from an agreement signed with Nova Scotia Business, Inc. (NSBI) that entitles DSM to earn significant rebates through NSBI’s Strategic Investment Funds in exchange for the creation and maintenance of new jobs in the life sciences sector.

"This investment of $30 million is another example of DSM's ongoing commitment to the nutritional industry in North America as well as to the communities in which our people live and work," said Hugh Welsh, President of DSM, North America. “We have high confidence in the science of omega-3s as well as the future market for omega-3s”.

When it was acquired by DSM in 2012, Ocean Nutrition Canada was a Canada-based supplier of fish-derived EPA and DHA, headquartered in Halifax, Nova Scotia with production sites in Canada, the United States and Peru. Every day over 21 million servings of its MEG-3 product line are consumed in supplements and foods and beverages across the world. Martek, a leading US-based producer of omega-3s, was acquired by DSM in 2010 and brought new opportunities in the infant nutrition segment as well as the opportunity to channel and accelerate the growth of the company’s products into other regions, applications and market segments.

Supported by a growing body of scientific evidence, long-chain omega-3 fatty acids have been shown to provide significant health benefits, including roles in infant development as well as brain, eye and cardiovascular health throughout life. Authoritative recognition of their importance in health is evident from the fact that the omega-3 fatty acids DHA and EPA were recently selected, along with vitamin E, from 16 nominated nutrients for Dietary Reference Intake (DRI) review by joint panels of the U.S. and Canadian governments. The DRI Committees prioritize new DRI reviews based on evidence of significant new data since the last DRI review, as well as relevance to current public health concerns.

The U.S. and Canadian government agencies jointly decided to schedule a workshop in 2015 on the potential use of chronic disease endpoints in setting DRI values for the selected nutrients. This workshop will address whether and how chronic disease outcomes can be incorporated into setting DRI values and is expected to lay the foundation for an expert report on this critical aspect of public health.

“Omega-3 from fish oil is one of the most-studied nutrients in the last 30 years. Despite the well-established, scientifically-proven health benefits of omega-3s, many consumers do not obtain enough from their daily diets,” said Will Black, Vice President of Marketing for DSM North America. “ Unfortunately, there has been a slowdown in the Omega-3 consumption over the past two years, caused in large part by negative media coverage of questionable scientific studies. Consumers get confused with these conflicting messages, so in addition to investing in hard assets, DSM will continue to invest in more science and consumer advocacy and education of Omega-3.”

In response to this situation, DSM led the formation of an industry coalition working with GOED (Global Organization for EPA and DHA), which is working on a strategy to rebalance the tone of the media conversation about omega-3s for the benefit of the industry.

DSM’s combined investment in Ocean Nutrition Canada, Martek and the expansion of the Nova Scotia facility tops $1.3 billion, a clear declaration of confidence in the science and long-term market potential of long-chain Omega-3 fatty acids in human health. The Omega-3 category offers significant growth opportunities across a broad range of market segments and applications. Through its multi-faceted investments in North America, DSM Nutritional Products continues to demonstrate strong leadership and commitment to the nutritional lipids industry.

The recent announcement by the Canadian and U.S. governments that the long-chain omega-3 fatty acids DHA and EPA and the fat-soluble vitamin E have been selected to undergo Dietary Reference Intake (DRI) review bodes well for the future of the nutritional products market. Omega-3 fatty acids, vitamin E and 2 other nutrients were selected from 26 nominations (16 nutrients) as being worthy of the in-depth review process that is undertaken for the establishment or revision of a DRI.

“We are very gratified to see this recognition of omega-3 fatty acids and vitamin E by such authoritative nutrition leaders as the DRI committees in North America,” said William Turney, Head of Regulatory Affairs for DSM Nutritional Products North America, the world’s leading supplier of nutrients to the dietary supplement, food and beverage industries. “DSM has a deep commitment to the nutrition industry and strong confidence in its future.”

Because the DRI review process is lengthy and expensive, the DRI Committees must prioritize new DRI reviews. The criteria are evidence of significant, new, and relevant data published since the last DRI review, and relevance to current public health concerns.

In the case of long-chain omega-3 fatty acids, there is currently no DRI and establishment of a reference value would be useful because it would provide a parameter to assess the public’s status of these nutrients. A growing body of scientific evidence continues to show that long-chain omega-3 fatty acids may provide significant health benefits throughout life, including roles in infant development, cognition, eyesight and cardiovascular health. “How much is needed?” is the proverbial 64-thousand-dollar question.

“Establishment of a DRI for Omega-3’s will be a huge step forward for consumers, health care providers and manufacturers,” explained Will Black, Vice President of Marketing for DSM Nutritional Products, North America. “Once there are accepted reference values, appropriate guidelines for supplementation and fortified foods will be available, as well as guidelines for labeling and other forms of consumer communications.” He continued, “In the case of vitamin E, the current DRI was established in 2000 and needs to be revisited. Since then, thousands of studies have been conducted on vitamin E’s role in cardiovascular health, diabetes, eye health, immune function and more recently cognitive health.”

The U.S. and Canadian government agencies also announced a workshop in 2015 on the potential use of chronic disease endpoints in setting DRI values for the selected nutrients. This workshop will address whether and how chronic disease outcomes can be incorporated into setting DRI values, which would be a landmark in the history of the DRIs. Historically the DRIs, and formerly the RDAs, were viewed as the amount of a nutrient needed simply to prevent deficiency disease in the majority of the population. Accruing science through the past 20 years suggests that more liberal intakes of certain nutrients may have an impact on quality of life through the lifespan.

“Both an expert report on the potential of nutrients to reduce risk of chronic diseases and new DRIs will have a tremendous impact on the marketplace,” said Black. “They will give people a framework to evaluate whether they are getting enough of these critical nutrients in their diet.”