Corbion is celebrating the highest H1 growth in the Preservation category in its history, according to the company’s 2021 first half-year results. The continued interest in replacing fossil-based and synthetic ingredients allows natural preservation in food solutions to further “gain ground,” hails the company.
Corbion reported net sales of €515.6 million (US$605.2 million) in the first half of 2021, driven by organic net sales growth of 15.5 percent. Adjusted EBITDA in the first half of 2021 increased organically by 4.7 percent to €77.1 million (US$90.5 million).
Meanwhile, the company’s sales during H1 organically increased by 12.6 percent in the Lactic Acid & Specialties business unit, in contrast to the same period of last year.
Developing early-stage initiatives, Corbion plans to bring omega-3 DHA to profitability in 2022. Its three main product categories are: algae-based omega-3, starting with fish feed applications; algae proteins in cooperation with Nestlé; and its new co-polymer platform that expands on its (medical) polymer expertise.
Non-core activities comprise emulsifiers, which will have a declining strategic fit in the future and will be managed for value.
Sustainable Food Solutions
Corbion reports “good progress” with the development of its natural ferments, mold inhibitors, natural antioxidants and antimicrobial solutions. “Our new antioxidants lab in the US is now fully staffed and is capable of running all significant analytical methods and making a broad range of powder and liquid formulations,” the company states.
The fermentation specialist also attributes the H1 growth to its improved pipeline and higher win rates. This ties into Corbion’s five-year business strategy that sharpens the supplier’s focus on food preservation and production strategies, as well as health and environmental sustainability.
H1 net sales in the Sustainable Food Solutions segment rose from €267.6 million (US$314.1 million) in 2020 to €284.1 million (US$333.4 million) in 2021. “We plan to expand on this solutions model with natural food preservation and functional systems as our core capabilities, enabling us to accelerate growth in close adjacencies,” the company affirms.
In this arena, Corbion upgraded its Listeria control model to increase speed-to-market and accuracy of food safety measures last month. Also, the company partnered with TruTerra to promote sustainable agriculture practices among farmers within Corbion’s US soybean supply shed.
In Q2, all segments in the Lactic Acid & Specialties segment “grew significantly,” says the financial report. And overall, all product segments grew except for esters.
Most of the growth was driven by sales of lactic acid to the Total Corbion PLA joint venture and other end markets, such as hygiene applications. Biopolymers started to recover in Q2 with double-digit growth rates.
“We continue to see strong growth in pharma-grade lactates for the renal and IV markets, primarily driven by home hemodialysis. Esters decreased as the higher demand from the semiconductor market was more than offset by the decline in the agrochemicals market due to reformulations,” states the company.
Corbion’s estimated construction costs of the new 125 kt lactic acid plant in Thailand increased to US$230 million, up from the estimated US$190 million, due to increased input costs, such as steel prices, engineering rates, additional COVID-19 measures, as well as a broadened scope related to site infrastructure. The total estimated capital expenditure for 2021 is €165 to 180 million (unchanged, US$193.6 million to 211.2 million).
Growing the aquaculture sector
Net sales in the Incubator segment increased organically by 161.1 percent in H1 2021 driven by significant growth in AlgaPrime DHA (algae-based omega 3) as the aquaculture sector is becoming more receptive to using sustainable feed ingredients, also driven by increased consumer awareness.
In addition to the salmon market, Corbion is seeing growing interest in markets such as shrimp and pet food. “Due to the strong growth development, we are increasingly confident on achieving EBITDA profitability in our omega 3 business in 2022,” it predicts.
The Adjusted EBITDA loss in H1 2021 declined to €-6.8 million (US$-7 million to US$-9.3 million), which was € -9.0 million (US$-10.6 million) in H1 2020, due to the growth in sales.
Onward throughout the year
Anticipating upcoming hurdles to business growth, Corbion states it currently expects price inflation related to raw materials and freight for its core activities to amount to €30 million (US$35.2 million) in 2021.
“We are facing broad-based and rapid increases in our input costs. Prices for freight and raw materials have increased substantially,” flags CEO Olivier Rigaud.
“In response, we are taking firm pricing actions which will fully materialize next year, while partially contributing in 2021. Consequently, we are currently facing margin pressure and are reducing our Adjusted EBITDA margin outlook for our core activities for 2021 to 13 to 15 percent.”
Moreover, Corbion aims to restore the Adjusted EBITDA margin of its core activities to above 15 percent in 2022.
“For 2022, we anticipate a further price inflation impact on our core activities of €20 to 25 million. On the sales side, the majority of our contract prices have been fixed for the remainder of this year. Although we are implementing firm pricing actions, given the nature of our contractual position, our margin recovery will become visible in 2022,” the company concludes.
Edited by Anni Schleicher
International Flavors & Fragrances (IFF) has announced the appointment of Frank Clyburn as CEO and member of the board of directors, effective 14 February 2022. Clyburn, who will step down from his position as executive VP and president of human health at Merck & Co, succeeds current IFF CEO Andreas Fibig
Jack Link’s-owned meat snacking brand Peperami has launched new chorizo five-packs to add to its extensive snack portfolio. The new chorizo sticks are made with 100% pork, packed with protein, contain 99 calories and are unpasteurised to maintain a fuller flavour — providing a shelf life of over six months.
While foam is certainly desirable in the bathtub or on beer, preventing foam – for example in industrial processes – is a much-discussed topic. A team of researchers at the Max Planck Institute for Polymer Research has now shown that so-called “superamphiphobic surfaces” can be used to prevent foaming.