DSM has revealed plans to create a joint venture with Chinese firm Nenter & Co, which will include all Nenter’s production and related assets for vitamin E.
The Dutch nutrition company will acquire a 75% shareholding in the joint venture for approximately €135 million.
The venture will acquire and operate vitamin E production facilities in Jingzhou, Hubei, China, and have a minority shareholding in Nenter’s Shishou facility, also in Hubei.
Both companies will upgrade and refurbish the facilities to secure a quality and sustainable supply of vitamin E.
The new business will exclusively produce vitamin E for DSM and there will be a profit share agreement in place between the Heerlen-headquartered company and Nenter.
DSM currently produces vitamin E in Switzerland and it said the joint venture will allow it to simplify its supply chain by expanding production to Asia Pacific.
In a statement, DSM said: “Vitamin E is well recognised and accepted as nature’s most effective fat-soluble, chain-breaking antioxidant, protecting cellular membranes from being attacked by lipid peroxyl radicals.
“Although primarily known as an efficacious biological antioxidant, vitamin E has more benefits, including maintenance of the structural integrity of all tissues and substantial contribution to optimum health and disease resistance of farm animals due to its modulating effects on the immune system.”
The transaction is subject to several regulatory approvals and expected to close in the second or third quarter of 2019.
Last year, DSM announced a series of upgrades to its vitamin C production plant in Jiangshan, China, as part of its “ongoing commitment to quality, safety, sustainability and production efficiencies” throughout its vitamin C portfolio.
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