Can you introduce dsm-firmenich to our audience?

In May 2023, the merger of equals between DSM and Firmenich was finalized, and dsm-firmenich was formed. dsm-firmenich is a Swiss-Dutch company listed in Amsterdam. We have revenues of over €12 billion and are present in almost 60 countries with nearly 30,000 employees worldwide. Our business is structured into four business units, namely: “Perfumery & Beauty”, “Taste, Texture & Health”, “Health, Nutrition & Care”, and “Animal Nutrition & Health”.

What was the strategy behind the DSM and Firmenich merger?

Our goal with this merger was to create a company that is in a “category of one” by combining the essential, the desirable, and the sustainable. On the dimension of the essential, we want to positively impact the lives of billions of people by providing healthy solutions, such as vitamins, probiotics, and supplements. Whereas on the desirable dimension, we want to provide great-tasting foods and great-smelling perfumes that consumers love. On top of all these, dsm-firmenich strives to deliver sustainable products such as plant-based meat & dairy alternatives and use renewable and sustainable ingredients among others.

DSM and Firmenich were both industry leaders in their own right, with strong track records in creating value and delivering results, so I would describe the merger as a ‘marriage made in heaven’. The companies’ portfolios did not have significant overlaps but rather complemented each other. When merged, various business divisions of each company created sales synergies. For example, the ‘Perfumery & Ingredients’ division of Firmenich synergized well with the active ingredients of the DSM portfolio. Moreover, the merger also created opportunities to reduce costs by leveraging economies of scale.

What is dsm-firmenich’s approach to R&D?

dsm-firmenich spends €700 million in R&D annually at over 15 research centers globally, including one in Shanghai. Our teams seek to develop disruptive products and technologies and create value while being a force for good. For example, we recently used AI tools to speed up the development of new flavors and fragrances in our products. We also developed an algae-based omega-3 oil, Veramaris. This omega-3 oil is not only an essential supplement for brain, eye, and heart health but also good for the planet – one metric ton of Vermaris algal oil is the equivalent of 60 tons of wild-caught fish.

What are some challenges facing the industry in the region?

We are currently living in a VUCA (volatile, uncertain, complex, and ambiguous) environment. Inflation rates have reduced but remain high, nonetheless. We are seeing some improvement in raw material prices, but certain natural ingredients, for example, are still costly. As markets opened after the pandemic, a lot of customers stocked up. This has resulted in de-stocking today, thus softening demand for many products. The ongoing volatility in oil prices has also impacted manufacturing costs while the APAC region has felt a steep rise in interest rates, which has also contributed to the softening in demand. However, many of our solutions cater to the food and beverage industries, and demand for these solutions has not dipped significantly as food is always a necessity.

How does dsm-firmenich incorporate sustainability in its operations?

Before the merger, both DSM and Firmenich individually had strong track records in reaching their ESG targets, and dsm-firmenich remains committed to sustainability. We continue to offer sustainable products, such as our Firgood collection, which comprises a range of 100% natural extracts and forgoes the use of solvents in the extraction process, uses only the existing water in the biomass, and does not create harmful waste in its production.

We continue to review our portfolio to see how we can make our products more sustainable. For example, we developed the world’s first fully bio-based vitamin A, which reduces its production carbon footprint by 80%. Our ground-breaking feed additive for cattle, Bovaer, also helps farmers reduce enteric methane emissions from cattle by over 30%.

What is dsm-firmenich’s strategy and goals for the coming years?

The new combined company hopes to support our customers, many of whom are facing challenging times, by alleviating cost pressures in the market while helping ensure their products’ performance is not impaired. As a combined force, we have identified lots of opportunities in the APAC market. APAC remains an engine of growth for dsm-firmenich, and we remain committed to investing in the region.