May 13, 2014

DSM's animal nutrition and health division grew 18% in Q1 2014
 

 

DSM's Animal Nutrition and Health division saw net sales of €466 million (US$639 million) in the first quarter of 2014, an increase of 18% on-year, despite flat sales volume and lower prices of key vitamins.

Organic sales growth in Q1 was 7% with volumes up 10% compared to the weak Q1 2013 when the animal feed markets were still affected by the high commodity prices resulting from the 2012 drought.

The high prices have put pressure on the supply chain for nutritional ingredients, such as vitamins (notably vitamin E where the threat of a new entrant in China added to competitive pressures in H2 2013). Nevertheless, volumes for DSM's key vitamins, especially vitamin E, remained flat. However, prices were down 3% from Q1 2013.

According to the company, trading of vitamin E is firming and prices have started to recover as meat production has normalised and the potential new Chinese entrant will most likely not be in the market for some time. Contract prices for vitamin E are expected to improve gradually over Q2-Q3.

"There will be continued positive momentum in global animal protein markets and limited impact from avian flu in China & Mexico. However, aquaculture in South East Asia has not fully recovered from shrimp diseases and it is too early to tell the impact swine disease has in US & Mexico", according to the Q1 report.

Tortuga, the Brazilian trace mineral producer acquired by DSM in 2012, delivered sales of €64 million (US$88 million) and an EBITDA of €10 million (US$14 million) in Q1 2014.