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DSM completes €85m acquisition of Cargill's cultures and enzymes business

By Mark Astley, 07-Dec-2012

Related topics: Ingredients, Manufacturers, Consolidation

DSM has successfully completed its €85m acquisition of Cargill’s cultures and enzymes business – increasing its “critical mass” in the €1bn market for dairy industry cultures and enzymes.

Speaking exclusively with DairyReporter.com, DSM Food Specialties president Hans-Christian Ambjerg said that the deal will add a lot to the Netherlands-based company’s “presence in the market place.”

DSM announced in October 2012 that it had reached an agreement with US-based Cargill to acquire its cultures and enzymes business in an all-cash transaction.

The agreement followed exclusive discussions between the companies the month before.

Cargill’s cultures and enzymes business, which generates net sales of around €45m per year, employs around 200 people and boasts manufacturing facilities in France and in Wisconsin (US).

The integration of the businesses is underway and is expected to be complete by mid-2013.

Dairy industry ambitions

“The acquisition is a significant opportunity to gain critical mass in the market for cultures and enzymes for dairy,” said Ambjerg.

“This will be evident in terms production, where we will increase the number of production facilities available to our customers and to former Cargill cultures and enzymes customers.  By gaining access to Cargill we are gaining access to more production facilities in key markets such as Europe and North America, but also access to some really unique technology.”

“We will also tap into more complementary technologies through this acquisition. Cargill has some quite interesting things in the pipeline, which we very much look forward to being part of and introducing to the market place,” he said.

The combined business intends to launch a new “significant product for the dairy industry” in Q1 2013. According to Ambjerg, the combination of the businesses is in line with DSM’s ambitious growth plans for its dairy business.

“This will work extremely well with our ambitions, and we believe the dairy market is a very interesting market. It is worth more than €1bn in market size at the moment, and the market is growing.”

“What we have seen - and what makes us very excited - is that we see very strong harmonisation in the offerings from Cargill and DSM,” he added.

Innovation machines

Ambjerg also revealed that Cargill's current cultures and enzymes business line director, Gerald Dard, will lead the new integrated business unit.

The appointment is due to be announced later today.

“Until yesterday, he was heading up Cargill’s cultures and enzymes business,” said Ambjerg.

“This is a sign that we consider the work that Cargill has been doing in the dairy area is significant and very interesting.”

“By combining these two innovation machines we are very confident that we will become a better partner for the dairy industry in the future,” Ambjerg concluded.