CSM OPTING FOR A NEW BIO-BASED STANCE Pick of the News


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ollowing a comprehensive review of the group’s strategy, instigated by an earlier Business Review, CSM has announced it intends to transform into a bio-based ingredients company


focusing on the Purac and Caravan Ingredients businesses. Bakery Supplies requires funding to participate in the market


consolidation, and bio-based ingredients also has attractive opportunities to invest in value creating, high growth activities. In the longer term, CSM does not have sufficient financial


resources to exploit both. CSM therefore proposes to start a major divestment process for the North American and European Bakery Supplies businesses that will enable the group to redeploy capital into activities better able to deliver higher growth and enhanced shareholder value. In total, the combination of Purac and Caravan Ingredients in


2011 had sales of €704 million before central costs and one-off costs of €123.5 million. The combination will be a leading supplier of innovative, bio-


based ingredients for preservation, nutrition, fortification and stabilisation, serving end markets in food, chemicals and polymers. The combination will target growth opportunities in new lactic acid applications such as bio plastics, animal health and nutrition, as well as next generation, bio-based alternatives for oil-based materials, all with superior performance and environmental credentials. Geographically, the combination will


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be better balanced than CSM is today. Purac is an


innovative biotechnology company. It is the world


market leader in lactic acid and its derivatives. Purac is leveraging its fermentation capabilities to expand


beyond lactic acid into other bio-based alternatives for petrochemically based products. Caravan Ingredients has leading positions in the North


American markets for specialty ingredients including lactic acid based emulsifiers, functional blends containing enzymes, and fortification ingredients. Approximately 40 per cent of Caravan Ingredients’ sales are in


non-bakery applications in both food and non-food markets. The Bakery Supplies businesses to be divested had sales in 2011


of €2,409 million before central costs and one-off costs of €127.5 million. CSM is a major supplier of bakery products and a leading player in natural food preservation.


European Baker Magazine - Digital Digest • www.worldbakers.com 2­


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