DSM Premix Vitamin Plant, Mexico

The vitamin premix plant at El Salto in Jalisco, Mexico (near Guadalajara), was a company drive to expand operations in the premix vitamin market (at the time, for Hoffman La Roche). The new facility has the ability to manufacture a variety of vitamins (including vitamin A) and forms an important part of the DSM supply network. DSM purchased the Hoffman La Roche vitamins business in 2002.

VITAMIN AND MICRONUTRIENT MANUFACTURE FOR LATIN AMERICA

The El Salto premix plant, which replaced the existing premix installation in Mexico City, was inaugurated on 21 February 2000 and started production in early March 2000. It manufactures blends of various vitamins and other micronutrients for further processing and integration into food, feed, pharmaceutical and cosmetic products. Its production capacity is around 1,800 premix tonnes per year.

Located next to the company's existing production plant for feed premixes in El Salto, the new manufacturing facility forms an inegrated site that can supply industries across Mexico and Central America. Furthermore, good transport links mean that the plant has yielded economies of scale, which has rendered it more cost effective than its predecessor.

The construction and outfitting of the plant is estimated to have cost $8.2m. The investment was made on new laboratories equipped with the most sophisticated technologies for quality control of the raw materials and final premixes, and a warehouse for storing the entire product range.

VITAMINS MARKET

During 1999, Hoffman la Roche had a commanding market share of 40% in vitamins. However in the period from 1990 to 1999, they were involved in a price fixing cartel for vitamins with two other companies, BASF and Rhone-Poulenc SA. During 1999 after a legal case Roche was fined a total of $500m in the US courts for this activity, which was followed by a similar punishment from the European Commission (€462m fine in 2001). The vitamins business was sold off shortly afterwards to DSM.

GLOBAL PREMIX MARKET STRENGTHENS

An estimated 30% of the world's population suffers from some form of vitamin or mineral deficiency. Consequently, the scope of the global vitamin premix market is massive. In Latin America and other developing world regions, food fortification through vitamin and mineral supplements has a huge market potential.

Today, companies are moving away from using single vitamins to fortify their products. Instead, they are demanding combinations of products that have to be supplied from a premix plant. However, the global price of crude oil and raw materials for vitamin production has risen since 2005-2006 and consequently the price of these important food supplements have gone up.