DSM has agreed to spend €150m to increase its shareholding in Chinese pectin products maker Yantai Andre Pectin to 75%.
Having initially bought a 29% stake in the ingredients maker in 2013, DSM said it has now settled a shareholder dispute to purchase an additional 46%.
The remaining 25% of shares in Andre Pectin will continue to be held by the Shandong Andre Group. DSM said it will closely work with Andre Group to improve the operational performance of Andre Pectin, ensuring reliable supply through its global sales network of pectin, while securing compliance with DSM’s own safety, health and sustainability standards.
Located in Yantai, Shandong Province, Andre Pectin is said to be “Asia’s largest producer of apple and citrus pectin”, hydrocolloids providing texture solutions for food and beverages. With 410 employees, DSM drew attention to the company’s “strong organic sales and profit growth track record”.
The deal expands DSM’s hydrocolloid portfolio, complementing its stakes in DSM Zhongken Biotechnology and DSM Rainbow (Inner Mongolia) Biotechnology.
Hydrocolloids are thickeners and stabilisers that dissolve, disperse or swell in water to provide a range of functionalities, including gelling, texture, mouthfeel, viscosity and suspension.
According to DSM, demand for hydrocolloids is driven by three underlying consumer trends: the quest for convenient foods and beverages, consumers’ increasing demand for dairy and plant-based protein drinks, and a move towards clean labelling.
It is expected the transaction will close in the first or second quarter of 2019.
The announcement comes a week after DSM revealed plans to create a joint venture with Chinese firm Nenter & Co to make vitamin E.
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