DSM completes acquisition of stake in Chinese firm Andre Pectin

Royal DSM, the global life sciences and materials sciences company, has completed the acquisition of a 19% equity interest in Yantai Andre Pectin Co Ltd (Andre Pectin), a China based producer of texturing ingredients. DSM announced this acquisition on 5 May 2013. DSM had previously acquired a 10% stake in Andre Pectin from Hony Capital. DSM's total interest in Andre Pectin is now 29%. The parties have agreed that DSM has option rights to increase its stake in Andre Pectin to a majority stake at a later stage.
 
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Andre Pectin, headquartered in Yantai (Shandong Province, China), was established in 2003 and is active in the manufacturing and sale of apple and citrus pectin, a key food hydrocolloid providing texture, as well as pectin related food products. Andre Pectin realises annual net sales of around Euro 30 million. As the only successful global pectin market entrant in the past 20 years, Andre Pectin is the only significant pectin manufacturer in Asia with premier access to the world's fastest growing specialty food ingredients market.
 
With a market size of around € 6 billion with an annual average growth rate of 3-5%, the global hydrocolloids market provides an attractive growth area to leverage DSM's bio-ingredients capabilities and global customer access. Some food hydrocolloids, such as pectin and gellan gum possess unique properties that are highly relevant to a broad range of processed and healthy food applications.
 
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DSM's investment in Andre Pectin, synergistically combined with the previously acquired gellan gum assets based in China, creates a China-based hydrocolloids growth platform, in line with DSM's strategy for the nutrition cluster, continued value growth.