PURAC increases prices worldwide

14/10/05 CSM subsidiary PURAC will as of November 1, increase the prices for its lactic and gluconic acid and their derivatives. The price increases are 5-10% and differ per product. The company said that the price increases are an unavoidable consequence of rising raw material, packaging, energy and processing costs, which PURAC faces around the world.

The news comes as PURAC begins the construction of a lactic acid plant in Thailand. The investment in the new site will be EUR 98 million, which includes the lactic acid plant and other facilities such as a sodium/potassium lactates plant, offices, warehouses, and utilities.

PURAC expects the lactic acid and lactic acid derivatives market to continue to grow by more than 10% annually. The main driver for this growth is the strongly increasing attention for food safety, health, and the environment. Improved functions of food, including longer shelf life, mineral enrichment, pH regulation and enhanced taste profiles, are the most important applications of lactic acid and lactic acid derivatives. Additional growth will come from lactic acid for non-food applications such as biodegradable plastics.

The new lactic acid plant will have a capacity of 100,000 tons undiluted. The sodium/potassium lactate facility will have a capacity of 15,000 tons. With this investment PURAC is responding to the worldwide future demand for lactic acid and lactic acid derivatives and, at the same time, reinforcing its position in the Asian market.

The plant will be located on the Asia Industrial Estate at Map Ta Phut, Rayong Province on the eastern seaboard of Thailand. Construction will start in Q4, 2005 as soon as definitive approval has been received from the Thai government. This is expected within the coming weeks. The plant will start up end 2007.

The location in Thailand was chosen because of the abundance of cost-effective carbohydrate raw materials for fermentation (sugars and starches), the proximity of other chemicals and good energy supply, the efficient logistical infrastructure, and the availability of a skilled labour force and government incentive programs. The plant will be very close to Thailand's main container port Laem Cha Bang for exports in the Asian region and worldwide.

The plant will use PURAC's latest technology and will be very competitive. The site offers significant potential for further expansion.

www.purac.com