Martek warns of ARA shortages

The incident has temporarily closed the ARA production line at DSM's Belvidere, New Jersey manufacturing plant.

DSM is still evaluating the extent of damage to the drying equipment and the impact on output, but initial estimates suggest that the line could be down for a period of weeks, said Martek.

Martek was also hit by production shortages at DSM's ARA plant in Italy last year, after a national power outage affected its facility in Capua. This raised costs for the US firm and also resulted in DHA inventories piling up as they could not be blended with ARA.

All of the leading infant formula makers now offer products fortified with Martek's DHA and ARA blend, triggering a major surge in demand in the past year. But while Martek produces DHA at its own facilities by fermenting microalgae, it relies on the Netherlands-based DSM for ARA, sharing intellectual property on the manufacturing process.

The damage to the US plant will reduce Martek's third quarter revenue, currently estimated to be from $5 - $10 million, although the company said it could not properly forecast the impact until further assessment of the damage to equipment.

DSM Food Specialties, which has supplied Martek's ARA since 1997, recently said it is to double production of arachidonic acid to meet growing demand. The companies will also increase their R&D collaboration to look for new applications for the ingredient, such as in animal feed.