DSM Nutritional Products to Cut 120 Jobs in Basel Area in Reorganization

22 Jan 2014 --- DSM Nutritional Products announces structural adjustments in the region around Basel, Switzerland. These impact mainly headquarters in Kaiseraugst as well as, to a much lesser extent, the sites in Sisseln and Village-Neuf. This is the consequence of the almost concluded integration of a number of significant acquisitions and the associated strategic re-direction.

The intended implementation will unfortunately lead to unavoidable redundancies of around 120. Overall, the company employs in the region around Basel approximately 3'000 people. The consultation process with employee representatives has been initiated.

DSM Nutritional Products, a business entity of Royal DSM (Heerlen, the Netherlands), is the world’s largest producer of vitamins, carotenoids, nutritional lipids, enzymes and other healthy ingredients for human and animal nutrition. It was founded in 2003 after the takeover of the Division Vitamins & Fine Chemicals from F. Hoffmann-La Roche.

DSM Nutritional Products has grown strongly particularly due to acquisitions during the past three years: 2011 and 2012 Martek Biosciences (Columbia MD USA) and Ocean Nutrition Canada (Halifax Canada) were acquired, the two market leaders in nutritional lipids. At the end of 2012, DSM acquired Fortitech (Schenectady NY USA), a specialist in customized blends for Human Nutrition. Most recently, in 2013, Tortuga Zootécnica Agrária, Sao Paulo, was acquired, the Brazilian market leader in organic trace minerals for animal nutrition and health with a focus on pasture cattle raised beef and dairy cattle. All in all, approximately 3’000 new employees plus additional R&D centers and various manufacturing sites mainly in North America and Brazil are now also part of DSM Nutritional Products.

After the successful worldwide integration of the acquisitions and strategic adjustment, now a structural adjustment is intended in the region around Basel. On the one hand it’s about newly defining the focus of R&D activities and directing those activities consistently towards the key portfolio pillars. On the other hand central support functions are to be organized in a more efficient way, and better adapted to the needs of local and regional subsidiaries and their customers respectively. The company regrets that redundancies in the region around Basel are unavoidable within that context.

The consultation process with employee representatives has been initiated and as always DSM is committed to handling this process within the legal framework in a socially responsible manner.

Yesterday, DSM reported "moderate" results for its Nutrition business. In Human Nutrition & Health volumes were essentially flat compared to Q4 2012 but down from Q3 2013. Lower consumer demand in the US for dietary supplements, even more pronounced for fish oil based Omega 3 dietary supplements negatively impacted sales volumes in Q4. Also the food & beverage markets in Western countries were soft. Premixes and Infant Nutrition showed good performance. In Q4 Fortitech realized sales of approximately €43 million and EBITDA of around €13 million.

In Animal Nutrition and Health volumes were up compared to the weak Q4 2012 and in-line with Q3 2013. Product mix was less favorable. In addition a prolonged period of demand weakness earlier in the year has affected prices of several animal nutrition products negatively in 2013, most notably vitamin E. This demand weakness in combination with market speculation about possible increases in supply has increased price pressure on this vitamin. In Q4 Tortuga delivered sales of approximately €68 million and an EBITDA of about €9 million.