Speaking at Danisco’s annual general meeting yesterday, the chairman of the board of directors Jørgen Tandrup confirmed an organic revenue growth of 5 per cent and an increased operating profit in the first quarter results, which will be announced next month.
CEO Tom Knutzen said the profit growth was partly a result of extensive costs savings throughout the business, as well as improvements to procedures.
“But we are not finished yet – far from. Going forward, our initiatives will result in further improvements and at the same time we will improve the service we provide to our customers,” he said.
These improvements include initiatives such as the new organisational unit Logistics Food Ingredients (Logfi), which looks after the logistics related to customer supplies. Moving forward, Logfi is expected to act as a link between Danisco’s sales force and its customers, to communicate customer needs and streamline production planning.
Genecor and sweeteners
Company executives also discussed the two major challenges faced by Danisco last year. These were the hits to its Genecor business, which saw a significant drop in earnings, and its Sweeteners division, which was impacted by competition within xylitol.
“Since then Genencor has regained momentum in line with our plans, with strong growth and improved earnings thanks to many new and competitive products combined with extensive restructuring measures. We have not achieved our targets yet, but we are well underway,” said Tandrup.
“Sweeteners, though still challenged, achieved a well above-target cash flow for the year. However, we felt compelled to make a DKK 700 million goodwill writedown and to introduce additional restructuring measures. We are starting to see the results of this and are bringing Sweeteners back on track with reasonable earnings and cash flow,” he added.
The firm said that looking forward it will focus on streamlining its business and continue to invest in sustainability and innovation.
Sustainability
Knutzen said a renewed focus on sustainable production will help “focus and strengthen” its competitive power.
“Humanity is faced with drastic global challenges. The climate is changing and the world population is increasing. (…) In 2050 – only 40 years from now – the global population is projected to reach nine billion. That is close to 30 per cent more than today. So we have to act in a sustainable way, but the development also offers significant business opportunities,” he said.
“Our strategy is therefore focused on the production and development of products and solutions based on natural raw materials and biotechnology. Both production and products must be sustainable, but even more important: our products must contribute to fighting global warming and the use of scarce resources such as oil and water.”