German fine chemicals group Degussa is to disband its Health & Nutrition division next month as part of a reorganisation of its food and feed activities.
The business units that make up the division are to be allocated to other Degussa divisions. Degussa said the move, effective from 1 April, was related to the differing market structures in food and feed activities and the "resulting lack of synergistic potential". The changes will also allow Degussa to simplify its organisational structure, according to the company.
It added that the Flavors & Fruit Systems, BioActives, and Texturant Systems activities will continue to be core operations and will be the focus of targeted expansion under a new business unit, expected to have sales of around €600 million (comparable to other Degussa units). It is thought that as the three sections all supply to the end market of the food sector they will work well in a new unit.
Germany's third largest chemical company said this means it will be able to offer food industry customers a broad range of single-source products. Due to its proximity to the end-consumer markets, the new unit will become part of the Performance Chemicals division, which is to be renamed Performance Materials.
The future head of the new business unit, which like the previous division will be based in Trostberg, has not been named yet.
Also, the Feed Additives unit is to become part of the Fine & Industrial Chemicals division since it has pre-products in common with the division's activities.
Degussa generated operating profits (EBIT) of more than €900 million in fiscal 2002.