DSM Vadodara – a new life
|(L-R): Brian Wilcox, Global VP, Fortitech Premixes; Bharath Sesha, President, DSM; Rick Greubel, President, Human Nutrition & Health; Advait Pandit, Business Director, HNH and Peter Nuboer, Vice President, APAC, HNH|
Dutch-based, Royal DSM, a global science-based company active in health, nutrition and materials also has its unique competencies in life sciences and materials sciences. Seeing the tremendous growth opportunities in nutraceutical, food, beverages and dietary supplement markets in India, it recently inaugurated its 14th Fortitech premixes plant in Vadodara, Gujarat with an investment of over $10 million. The facility is spread across 5,000 sq mt and the commercial productions is expected to begin from May 2014.
Strengthening Indian presence
For multinational investors, Gujarat is becoming a lucrative and preferred destination to invest in various projects which motivated DSM to set up its 14th Fortitech premixes facility in the state. Commenting on the Indian investment, Brian Wilcox, Global Vice President – Fortitech Premixes, DSM Nutirtional Products, Human Nutrition and Health said, “DSM is a B2B company and we provide complete solutions to our customers. For us, India is a fast growing market and has a record of achieving double digit growth consistently. We realised that India has a better business opportunity for us and we have not invested in this market. And analysing the business potential we felt the urge to set up the plant in Vadodara.”
Highlighting the optimal benefits of having a facility in Vadodara Wilcox said, “Vadodara has easy access to the ports of Nhava Sheva and Kandla, as well as the industrial corridor of Delhi and Mumbai. Many of our customers have their facilities in Vadodara. Few of our clients like Abbott, Amul, Nestle etc. have their manufacturing facilities near our newly built plant. We feel that with the help of the new facility we will be in a position to meet our clients’ requirements more efficiently and this facility will accelerate growth opportunities to serve our global customers from India.”
The company has appointed 29 full-time people for Fortitech premixes plant in Vadodara for streamlining the work-flow of the facility. The facility will also be supported by a team of account managers and marketing managers along with a dedicated technical and regulatory manager. Moreover, a regional business development team in Malaysia and an upcoming innovation centre in Singapore shall support the plant team with their global expertise.
Bringing Fortitech to Vadodara
In December 2012, the company acquired Schenectady, New York-based Fortitech for a total enterprise value of $634 million. The acquisition of Fortitech accelerated DSM’s strategy to become a full solutions provider in food ingredient blends. It helped expand DSM’s value chain presence, while adding additional capabilities to its business. DSM Team in India stated, “With Fortitech and its workforce, DSM has a capability to deliver customised food ingredient premixes and blends to our customers while at the same time strengthening our international footprint.”
The new facility has a capability to cater to the company’s Asia-Pacific requirements i.e. India, Malaysia, Singapore with its teams split between Delhi and Mumbai, as well as a business development group, based in Malaysia and an upcoming Nutrition Innovation Centre in Singapore.
Bharath R Shesha, President, DSM India said, “India is on the verge of an explosion in the area of nutraceutical products. The nutra sector requires revolving spirit and awareness and I am confident that our new facility will help us cater to our customers’ requirements in a better way. This is a one-stop source for food, beverage, nutraceutical and pharma manufacturers and the company is looking for fortification as a way to differentiate their products from their competition.”
As per available information in the public domain, full-fledged production of this facility was set to commence in June 2013. Commenting on the delay in the commissioning process of this facility, Shesha said, “Fortitech – DSM acquisition occurred after we finalised building of the facility in Vadodara. At a time when we were in the midst of facility completion, Fortitech – DSM deal was concluded successfully. And post the deal DSM management decided to make this facility as the 14th Fortitech prefix plant of DSM. And immediately we revised the entire design process of this facility following Fortitech requirements. A few months back the construction work of this facility got finished and we have shifted almost all the equipment of the Fortitech Denmark to this facility which is a speciality of this plant. And that’s how the project got delayed for nearly 10 months.”
The company roughly spends about five per cent on research and development. It has built a state-of-the-art lab and production facilities at the Fortitech premixes plant at Vadodara which is similar to other global labs of DSM. The company has a fully automated process to avoid any human hazards, except for the vessel discharge process. Presently, it has a single discharge room facility and plans to increase it in the future depending on its necessity. It also has special rooms for charging and discharging of big sized vessels and mixing different batch sizes.
DSM plant at GIDC, Savli Vadodara
The company is uniquely positioned with its backward integration in the space of vitamins and carotenoids as well as Fortitech technology. “With this facility, we can now handle a portfolio of 1400 ingredients for blending. Ingredients manufactured by DSM will continue to come from our facilities in Europe and the US. DSM is currently sources certain third party ingredients like minerals from India. For our global requirements the same approved sources will supply to the newest Fortitech facility in Vadodara,” informs a team member of DSM. At present, the company outsources raw materials, mainly from Singapore.
For the new facility, the company has applied for the Food Safety and Standards Authority of India (FSSAI) manufacturing license and expects to receive it soon. Apart from this, the facility will also have ISO 9001: 2008 – Quality Management System certification. It is also expecting few more approvals for this plant such as FSSC 22000: 2010, ISO 14000: 2004, HACCP, GMP as well as Halal & Kosher certifications in the near future.
Richard (Rick) Greubel, President, Human Nutrition and Health, DSM Nutritional Products shared, “We are delighted to start our new Fortitech premixes plant in Vadodara. All Fortitech premixes adhere to the criteria set forth in our ‘Quality for Life programme’, which represents our unwavering commitment to quality, reliability, traceability and sustainability. As one of the fastest growing economies in the world, we believe that this facility in India will add to DSM’s overall growth and profitability. By expanding our presence, we aim to deliver more value to our Indian and South Asian customers.”
The company informed that the Fortitech premix plant is the latest addition and a perfect example of their investment in Indian market. A key element of DSM’s growth strategy has been to broaden its international presence to capture opportunities in high growth economies such as Brazil, Russia, India and China, said a team member of DSM. The share of sales in high growth economies as a portion of DSM’s total sales has increased significantly in the recent years, and accounted for around 39 per cent in 2013. It is DSM’s aim to increase this share to about 45 per cent by 2015.
Speaking at the inauguration ceremony, Alphonsus Stoelinga, The Ambassador of the Kingdom of the Netherlands said, “India and the Netherlands are very important economic partners for each other. India is the fifth largest source of Foreign Direct Investment (FDI) in the Netherlands and vice. This plant is a perfect example of Dutch FDI in India. But there is more to it: Royal DSM is recognised for its global leadership in initiatives related to food security, preventing hidden hunger and promoting sustainable development in high growth economies. The new Fortitech Premixes plant in Vadodara is testimony of its commitment to develop and deliver innovative nutrition solutions to the South Asian market,” he further added.
The DSM team remarked, “As one of the fastest growing economies in the world, we believe that India offers a tremendous opportunity for food, beverage and dietary supplement manufacturers. Our new site in Vadodara brings industry leading innovation capabilities and access to the broadest portfolio of nutritional ingredients to the Indian subcontinent. With this investment we have increased our commitment to our customers and have accelerated our growth plans in the region.”
Wilcox informed, “Growing economies, such as India, offer tremendous opportunities for Fortitech Premixes. The fast-paced lifestyles of today’s consumers mean that proper diet and nutrition are not always within easy reach on a daily basis. We have a long and successful history of working with food and beverage manufacturers to create fortified products that have a tremendous appeal to consumers. We are looking forward to continuing that tradition with our operations here in Vadodara. The talented workforce we have on hand here can only guarantee our success.”
Commenting on the benefits of the newly commissioned facility, Shesha said, “Our new Fortitech premixes site brings industry leading innovation capabilities and access to the broadest portfolio of nutritional ingredients to the Indian subcontinent. Also, we believe that currently there are no manufacturers in India which have integration nutrition solution capabilities for micronutrient mixes like DSM. Therefore, with this investment, we aim to increase the commitment to our customers and accelerate our growth plans in India.”
Set to grow
DSM has a long list of clients globally, including Merck, GSK, Bayer and Pfizer. The company does business worth $4 billion globally which is split between animal and human nutrition and personal care segments. Out of the total, 45 per cent business comes from the human nutrition segment. The company is targeting double digit growth. It has active pipelines for merger and acquisitions. The company is eyeing to establish its active presence in Pakistan, Nepal and Bangladesh.