DSM: More feed volume and flat vitamin E prices

Animal Nutrition and Health (part of the DSM Nutritional Products division) reached a net sales of €466 million in the first quarter of this year (Q1). This is 18% more than in the same period last year. Organic sales growth in Q1 was 7% with volumes up 10% compared to the weak Q1 2013 when the animal feed markets were still being  impacted by the high commodity prices resulting from the 2012 drought.

The high prices has put pressure on the supply chain for nutritional ingredients, such as vitamins (notably vitamin E where the threat of a new entrant in China added to competitive pressures in H2 2013). Nevertheless, volumes for DSM’s key vitamins, especially  vitamin E, remained flat. But prices were down 3% from Q1 2013. According to the company, the trading of vitamin E is firming and prices have  started to recover as: meat production has normalised and the potential new Chinese entrant will most likely not be in the market for some time. Contract prices for vitamin E are expected to improve gradually over Q2-Q3.

The business conditions for the animal nutrition market is according to DSM positive. “There will be continued positive momentum in global animal  protein markets and limited impact from Avian flu in China & Mexico. However, the aquaculture in South East Asia is still not fully recovered from shrimp diseases and it is too early to tell impact swine disease in US & Mexico”, according to the Q1 report.

In Q1 2014, Tortuga delivered sales of €64 million and an EBITDA of €10 million. DSM acquired the Brazilian trace mineral producer Tortuga in 2012.