Lonza to boost vitamin B3 capacity
growing demand for the ingredient from the food industry, the
company has said.
The construction of a new nicotinate plant - an investment of CHF50m (€31.5m) - will ramp up current capacity by 40 percent, an addition of 15,000 metric tons of product per year. Nicotinates, which include both nicotinic acid and nicotinamide, are vitamin B3 supplements used in the food, animal feed and pharmaceutical industries. "The new capacity in nicotinates is important for us to be able to meet the long-term demands of our customers," said Lukas Utiger, executive vice president of Lonza Life Science Ingredients. Vitamin B3 growth Indeed, strong growth for its nicotinates ingredients has been responsible for driving the overall performance of the firm's nutrition ingredients, which fall under the Life Sciences arm. In January this year, Lonza reported a 36 per cent increase in earnings, with total sales up by some 25 per cent to CHK2.8bn (€1.8bn). According to an analysis of the European Vitamin B Market by Frost & Sullivan, the market was worth €415m (£280m) in 2005. This is anticipated to grow to €901m (£607m) by 2012, equivalent to a compound annual growth (CAGR) of 11.7 per cent for the sector. Analysts at the firm said the growth of B-complex vitamins was being driven by a consumer interest towards self-medication. The B vitamins act as coenzymes in numerous biochemical reactions in the body. They are essential for proper growth and maintenance of cells, tissue and organs. Price hikes The growth in demand for Lonza's vitamin B3 has come in spite of price increases during the past year. In July 2007, Lonza hiked vitamin B3 prices by 12 per cent. In December 2007, the firm further increased its prices by as much as 17 percent. The Swiss biotech company blamed the increases on a "continued" increase of raw materials, energy and transportation costs. New plant Lonza said it is still evaluating options for the location of its new plant, and will take into consideration the location of new market growth and opportunities for manufacturing and market synergies. The new facility will also take advantage of innovations in technology and process development that are currently in pilot operations, said the firm. "These innovations will provide cost and efficiency advantages to all the company's nicotinate facilities," it said. According to Utiger, the "continued implementation of technologies and new processes (…) will secure our long-term cost leadership in this market." Lonza's current manufacturing plants for nicotinates are located in Visp (Switzerland), Guangzhou (China), and Nansha (China).
