Bovaer maker dsm-firmenich to split from Animal Nutrition & Health division

dsm-firmenich is set to separate the Animal Nutrition & Health division from the rest of the group, opting to focus on nutrition, health and beauty instead.

Animal Nutrition & Health is expected to operate under a different ownership structure, with all potential options currently being considered by the business. Ivo Lansbergen, who has led the division since 2019, remains at the helm.

The division’s performance had been heavily impacted by price fluctuations in vitamins, particularly during 2023, when vitamin prices remained low throughout the year. As a result, the company announced a full-year 2023 earnings forecast (adjusted EBITDA) of €1.8bn, which included an estimated negative vitamin effect of around €500m from and a negative foreign exchange effect of around €90m.

During a Q2 2023 trading update, dsm-firmenich revealed restructuring plans for its vitamins business in a bid to save around €200m per year. The plans included the closure of a second vitamin production plant in China and extended shutdowns of its Swiss vitamin plants. CEO Dimitri de Vreeze said the restructure would be ‘the largest contributor’ in a range of ‘self-help measures’ the company was working on to mitigate the effects of the global economic landscape.

While this cost-cutting program continues – and is expected to contribute €100m in adjusted EBITDA in 2024 and the full €200m in 2025 – separating the Animal Nutrition & Health division would enable dsm-firmenich to strengthen its nutrition, health and beauty business while reducing its exposure to future vitamin earnings volatility.

‘A difficult moment’

Commenting on the news, CEO De Vreeze said: “Our purpose at dsm-firmenich is to bring Progress to Life, as we boost innovation in premium, high-growth and resilient segments. ANH is a fantastic business that over the years we have built to be a true leader in the industry. This is a difficult moment, but we strongly believe that a separation would be better for both businesses and their employees, and ultimately generate better value for all our stakeholders.”

What will happen with Bovaer?

Bovaer, the methane-suppressing feed additive that’s been approved for use in more than 40 countries, is expected to remain part of the Group due to being seen as critical tool in reducing emissions in dairy, itself a key pillar in dsm-firmenich’s Taste, Texture & Health business.

The feed additive was most recently approved for use in Canada, with US approval expected to come in the first half of 2024.