Royal DSM, a global science-based company, announced Aug. 27 that it has completed the creation of a 75/25 joint venture with Nenter & Co. Inc., as first announced on Jan. 29.
DSM said the joint venture acquired all Nenter’s Jingzhou vitamin E production and related assets.
Further, the venture will immediately start implementing anticipated upgrade activities to ensure compliance with DSM’s safety, health and environmental standards and will, therefore, stop production. The shutdown will last as long as needed to finalize these significant upgrades, DSM said.
The shutdown was already planned for beginning of September, DSM said, and it will be extended to enable the implementation of the upgrade activities.
The joint venture now owns and will operate the vitamin E production facilities in Jingzhou, Hubei, China, and has a minority shareholding in Nenter’s Shishou facility in Hubei, where an intermediate for vitamin E is produced, according to the announcement.
The joint venture will produce vitamin E exclusively for DSM.
According to the company, the venture will upgrade and refurbish the facilities to secure a high-quality and sustainable supply of vitamin E, which complies with DSM’s safety, health and environmental standards.
DSM added that it will provide more information on the duration of the shutdown as soon as there is more clarity on the situation.
Last January, DSM announced that, in order to fulfill its future needs for vitamin E, it would acquire a 75% shareholding in the joint venture for a cash consideration of about 135 million euros.
Through this joint venture, DSM said it will enhance its vitamin E position and provide cost-effective access to additional capacity, allowing the company to continue to grow organically in vitamin E, which is an essential ingredient in DSM’s animal nutrition premix solutions.
The joint venture also enables the company to offer locally produced vitamin E in China and the Asia Pacific, in addition to its facilities in Switzerland. DSM said in January this will support its strategic actions to reduce its working capital requirements by simplifying its supply chain.
Vitamin E is well recognized and accepted as nature’s most effective fat-soluble, chain-breaking antioxidant, protecting cellular membranes from being attacked by lipid peroxyl radicals, DSM said. 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.