DSM quits artificial sweeteners business

30 March 2006 10:07  [Source: ICIS news]

LONDON (ICIS news)--DSM is to withdraw from the artificial sweeteners business and close the Geleen, Netherlands production facilities operated by joint venture Holland Sweetener Company, the Dutch chemicals, specialty materials and life sciences group said on Thursday.

Holland Sweetener Company (HSC), a 50:50 joint venture with Japan’s Tosoh Corporation, will terminate output of the artificial sweetener aspartame and the production of Twinsweet products in the fourth quarter of 2006, said DSM.

A Euro10m ($12m) charge will be taken in the first quarter against the cost of closing the production facilities and disbanding the joint venture, said DSM.

Established in 1985, HSC began aspartame production in 1988 and subsequently became the largest producer in Europe, said DSM. HSC’s aspartame and Twinsweet are used in soft drinks, dairy products as well as an alternative to sugar in hot drinks.

“The global aspartame markets are facing structural oversupply, which has caused worldwide strong price erosion over the last five years," said DSM in statement.

“Holland Sweetener Company has made a loss for several years and there was no chance in the foreseeable future that it would return to profitability,” added a spokeswoman for DSM.

DSM said its decision to exit the artificial sweeteners business was in line with the group's Vision 2010 strategy of focusing on profitable innovative growth and value creation.

Around 100 jobs will be affected at Geleen by the decision to quit the artificial sweetener market but DSM said it hoped to be able to re-assign the majority of those affected to other positions.

DSM was unable to give details of HSC's turnover or quantify the volume of output from its Geleen facilities.

By: Neil Sinclair
+44 20 8652 3214

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