DSM increases vitamin prices as costs, inflation and exchange rates bite
In full year 2010 DSM’s nutrition division, comprised of Food Specialities and Nutritional Products, reported net sales from continuing operations of €3,005m, up from €2,824m in full year 2009.
The increases are not unexpected, however, as in the outlook contained in its full year report DSM said it was anticipating an increase in inflation increase during the year, which would result in higher prices for energy and certain raw materials compared to 2010.
“DSM will actively seek to offset these through price increases. Currency exchange rates are expected to remain volatile in 2011; especially the current rate of the Swiss franc is unfavourable for the Nutrition cluster.”
DSM Nutritional Products is the world’s largest vitamin manufacturer, born out of DSM’s acquisition of Roche Vitamins in 2003. Its headquarters are in Basel, Switzerland.
Yesterday the Swiss Franc stood at 0.78134 against the euro, having risen steadily since April 2010 from 0.69724.
DSM has said that the price increases are due to “sustained changes in market conditions”, but it has not identified which raw materials are behind the price increase.
Nonetheless, in its annual report DSM said it expects the nutrition cluster to “achieve good sustained performance” in full year 2011, positively impacted by the acquisition of Martek.
No indication has been given as to whether the prices are likely to drop back in the future if the exchange rates shift once more or raw material issues are addressed.
The price increase for B2 and B6 relates to “all new business”, whereas the vitamin E, A and Calpan increases are for “all new orders”.