Chr. Hansen invests in natural colors R&D, results boosted by Food Cultures & Enzymes

28 Jun 2018 --- Chr. Hansen Natural Colors is upgrading its main R&D facility and Global Expertise Center as part of its continued investments in innovation. This expansion quickly follows another significant investment in Milwaukee to create a new Natural Colors site in the US, including expanded laboratory and production capabilities.

“Innovation has always been the backbone of our business. This investment is fully aligned with our ambitions to continue to deliver unique products to the market,” says Jacob Vishof Paulsen, interim executive vice president for Natural Colors.

“Today, we have the largest color portfolio in the industry and that stems from our innovation capabilities. We are constantly evaluating new sources of raw materials and innovative formulation technology to address an evolving market.”

“In line with our Nature’s no. 1 strategy, our continued investments into our innovation capabilities show our dedication to scientific excellence. We want to stay the undisputed leader in pioneering solutions within natural colors and coloring foods,” adds Jacob.

Chr. Hansen Natural Colors purchased the site in Montpellier 18 years ago. Since then, the site has grown to become the company’s main R&D center for natural colors & coloring foodstuffs.

The expansion and upgrade of the facilities will start in September with the full new building and site upgrade finalized by November next year.

Plans include doubling laboratory space and expanding space for more employees as well as creating a modern showroom for customers.

According to the company, the Global Expertise Center in Montpellier partners with global food brands and the upgrade is needed to keep pace with increasing market demand.

“The Global Expertise Center in Montpellier welcomes customers from around the world on a constant basis. At our facilities we work in partnership with our customers as we share our pigment and application expertise to find the solutions that meet the unique needs of their brands,” explains Luc Ganivet, vice president, Innovation.

The team in Montpellier has grown significantly over the years and currently has 40 employees.

“We will continue to grow in number as we accelerate our innovation strategy to respond to the increasing market demand. Now we will develop a more modern facility that will further improve our ability to work closely with customers and advance our R&D efforts, and create space for our growing team,” adds Luc.

“The project to expand will take place in phases to ensure that our daily work is not affected. We will continue to deliver our usual pipeline of activities during the renovations from Montpellier,” adds Luc.

Organic revenue growth 9 percent in first nine months of 2017/18
Meanwhile Chr. Hansen reports solid organic revenue growth of 9 percent in the first nine months of 2017/18 (3 percent reported growth due to adverse currency impacts): Food Cultures & Enzymes 12 percent, Health & Nutrition 8 percent and Natural Colors 5 percent.

EBIT before special items increased by 1 percent to €219.9 million (US$254 million), corresponding to an EBIT margin before special items of 27.5 percent.

In Q3, organic growth was 9 percent, and EBIT before special items increased by 3 percent to €84 million (US$97 million), corresponding to an EBIT margin before special items of 29.7 percent. According to the company, the outlook for 2017/18 is unchanged.

Given the performance and cash-flow generation in the first nine months, an extraordinary dividend totaling €105 million (US$121 million) will be paid out in July.

CEO Mauricio Graber is pleased the company maintained the sales momentum in Q3, led by broad-based growth in Food Cultures & Enzymes. “In Health & Nutrition, the human health business in North America is improving, and growth in emerging markets remains strong. Animal health again delivered strong growth in EMEA, APAC and LATAM, where we are strengthening our presence. Growth in Natural Colors improved, driven primarily by APAC and EMEA,” he says.

“Our strategic lighthouse projects – bioprotection, plant health, and human microbiome – all progressed well in the third quarter. Sales of bioprotective solutions grew approximately 25 percent in Q3, which was in line with expectations, bringing YTD organic sales growth to approximately 35 percent.”

Graber says that plant health showed robust sales growth, driven by the recently launched biological nematicides, Quartzo and Presence.

“We also extended the collaboration with FMC, our partner in plant health, and we look forward to launching our strong pipeline of new products in the years ahead,” he adds.

“In the human microbiome, we announced two significant scientific developments in Q3: A partnership with Prota Therapeutics to test our LGG strain in a Phase III clinical trial to potentially develop a treatment for peanut allergy; and an exciting result from a Chr. Hansen led a clinical trial that demonstrated how ingesting a carefully selected probiotic strain can reduce certain side effects associated with the regular consumption of acetylsalicylic acid – the active ingredient in aspirin.”

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