DSM cuts production costs with new vitamin E plant
25,000 tons - the world's largest - at a new plant that is being
hailed for its production efficiencies, reports Dominique
Patton.
At an official opening at the former Roche site in Sisseln, Switzerland last week, the company said the investment of some SF180 million (€117m), would allow it to meet rising global demand for vitamin E and considerably improve its competitiveness.
Vitamin production by the two leading European players, DSM and BASF, has come under significant price pressure from lower cost production and ready supply from China in recent years.
Both DSM and BASF are known to be considering options for vitamin C that may include moving some or all of their production to Asia.
But recent investments by both firms in vitamin E plants in Europe suggests that they have identified cost-savings in current production that will allow them to hold onto a majority share of the world's vitamin E capacity. BASF has capacity of around 20,000 tons, with two Chinese firms holding much of the rest.
DSM believes its new plant offers the lowest production costs of its competitors, giving it a stronger market position and benefits for customers.
"There's no new chemistry here. It's all about scale and cost in terms of automation," Bob Hartmayer, chief operating officer of DSM Nutritional Products (DNP), told NutraIngredients.com.
Construction of the plant started under Roche ownership in August 2001 and replaces production in Nuttley, New Jersey and an older plant in Sisseln.
"Where we had two plants, we now have one which could provide half of the world's current demand," added Hartmayer.
The new plant saves on personnel as well as energy and waste. It requires 41 people to run it, compared to 80 people for the previous Sisseln plant alone, which had a third of the capacity of the new plant. This increases labour productivity six-fold, said site manager Udo Haas.
"It also consumes 30 per cent less energy and about 25 per cent less waste. And waste is money," Haas explained.
Demand for vitamin E is being driven by the feed market (70 per cent of global supply goes to animal nutrition) but also by new research supporting its use in dietary supplements and increasing cosmetic applications. Current growth is expected to be sustained for "at least the next five years," noted Hartmayer.
He said vitamin E is growing faster than the overall food ingredients market at 5-7 per cent on average and is DNP's most important product after vitamin C.
"Our customers get improved quality and consistency," said Hartmayer, adding: "we're putting ourselves at the forefront of the industry. They know that because of this commitment [the new plant] that we will help grow the market and develop some of the science behind it."
He declined to comment on the possible impact on vitamin E prices but noted: "at the end of the day, customers always benefit when competitive pressure is eased."
The plant, which began production last November and took over entire vitamin E production in May this year, is currently running at 50 per cent of its full capacity. It can produce 3 tonnes per hour of the highest purity vitamin E.
It is said to be the largest single investment yet made at Sisseln.
