SWITZERLAND – High energy costs across Europe has forced Dutch multinational health and nutrition company DSM to temporarily halt production of its animal-grade vitamin A for at least two months commencing January 2, 2023.
The company further noted that it will reduce the production of its Rovimix vitamin E-50 as the feed additive also shares the same upstream infrastructure in common with vitamin A.
DSM however assured that existing contractual commitments will be honored with allocation procedures already activated across the company’s global production network to ensure that this happens in “an orderly manner.”
Earlier this month, DSM, citing the escalating energy and transport costs, said it was increasing prices for its vitamin products produced in Europe to secure future supply as production costs continue to rise.
In an interview with feed navigator, Silvia Sonneveld, VP, essential products, DSM Animal Nutrition and Health (ANH), said that despite the rising costs of energy, DSM was “committed to helping producers optimize feed costs, which make up between 50%-80% of their operating expenses.”
In the past few months, almost all major animal feed producers across Europe have announced contingency measures and production curbs.
Adisseo has announced a temporary shutdown of Dl-methionine production at its Commentry site in France due to the higher energy and raw material costs, as well as demand stagnation.
The supplier has recorded long-term contract cost increases of +26% for propylene, +13% for methanol and +78% for sulfur compared to one year ago.
Adisseo has also put an action plan in place to reduce the production level temporarily and to reinforce a cost management approach to vitamin A output, which has seen an unprecedented price decline over the previous quarters.
Germany-based BASF has also initiated a cost savings program as well, with that initiative focused on Europe and Germany, in particular.
The program will be implemented in 2023 and will run through to 2024 and targets annual cost savings of €500m, more than half of those to be realized at the Ludwigshafen site.