"Our customers can benefit from relying on a single supplier for multiple products, especially in an inflationary and disruptive supply environment."

Jun Saplad

REGIONAL PRESIDENT APAC, DSM-FIRMENICH

May 17, 2024

One year after the merger, could you share some of the synergies created within dsm-firmenich?

In early 2023, two iconic companies, DSM and Firmenich, merged to become the leading innovators in the nutrition, health, and beauty space. dsm-firmenich’s vision is to be a category-of-one by combining the essential, the desirable and the sustainable. I will share an example to explain. Last year, we launched an algae-based Omega 3, which is not only more sustainable than standard fish oil, but also twice as potent. Our innovative capabilities also allow us to deliver Omega-3 in the form of a gummy, as opposed to a typical gel capsule, which makes it more convenient and delicious too. This innovative product ticks the sustainable, essential, and desirable qualities to make a product that is special. By tapping on our extensive portfolio and capabilities, we want to create similar experiences across health, nutrition and beauty.

What are some notable developments in 2023?

We operated in a tough environment - a weaker economy in China, a lingering destocking cycle since the end of 2022, and unprecedentedly low vitamin prices have impacted our performance, both short-term and longer-term. In 2023, dsm-firmenich embarked on decisive actions to address this challenging environment. In the short term, we have implemented a vitamin transformation program. We also focused on cash and delivery, paid more attention to capital expenditure and inventory management to maintain a steady cash flow. At the same time, we pressed forward to accelerate the integration synergies from the merger. Longer-term, we are undertaking a strategic review of our portfolio, and took the difficult decision to separate the Animal Nutrition and Health division, so that it can realize its full potential under a separate ownership. For the rest of the year, we remain cautiously optimistic that the macroeconomics will improve. 

Could you elaborate on how you use innovation to differentiate yourselves? 

dsm-firmenich has very strong science and research capabilities that we continue to enhance both organically and through acquisitions. For instance, we recently acquired Adare Biome, a pioneer in postbiotics, as part of our strategy to build a gut health portfolio. In Asia, we not only host an R&D facility in Shanghai, but we also conduct on-the-ground applied research to test how our flavors, fragrances, or other ingredients interact with other ingredients and to cater to local preferences. For instance, dsm-firmenich uses tribology to test for mouthfeel and ensure the best sensory experience for end-consumers. Other areas of innovation where dsm-firmenich is particularly strong are biotechnology and chemosensory science, where we used receptor-based technology in both taste and smell to decode the emotions they may elicit. Under our EmotiOn program, we help our customers in the perfumery and beauty space to imbue their fragrances with certain emotion-triggering ingredients that are scientifically validated and regionally relevant.

Southeast Asia is seen as the source of the next wave of fast-paced, consumer-driven growth, alongside India. What opportunities and challenges do you identify for dsm-firmenich in this region?

Southeast Asia is full of opportunities. To focus on three specific ones, I would name the rising middle classes, an accelerating aging population (or what we call the “silver” generation with higher purchasing power), and the growth of the conscious consumer. These segments want the same things: high-quality products that are good for them, that they can take delight in, and that are also sustainable – but only if affordable. I say “if” because there continues to be a trade-off, affordability still plays a big role, especially in Southeast Asia. 

Challenging, on the other hand, is the ever-changing and ever-more-complex regulatory landscape, both within Southeast Asia and at a global scale. 

Do you have a final message for our readers?

I would like to go back to the essence of dsm-firmenich: We are a category-of-one company with a clear purpose to bring progress to life by combining the essential, the desirable, and the sustainable, as co-creators together with our customers in nutrition, health, and beauty. This mission is made possible by merging two legacy companies with highly complementary product offerings. Our customers can benefit from relying on a single supplier for multiple products (the flavor, the hydrocolloids, sugar-reduction solutions, the active ingredient, etc.), especially in an inflationary and disruptive supply environment.

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