Netherlands nutrition firm DSM has started forming a deal with Chinese biomedicine provider Nenter in a bid to acquire cheaper but quality vitamin E.
According to Chemical and Engineering News, the Netherlands-based firm is set to spend $154 million for the new vitamin E joint project. DSM will take on 75 percent of the budget while the rest will be shouldered by Nenter & Co., Inc.
DSM's animal nutrition business has been growing over the years, thus the need to obtain vitamin E from a leading yet cost-effective partner. The European company is expected to use Chinese vitamin E for antioxidant medicine that will help farm animals resist various diseases.
As part of the deal, DSM will acquire farnesene supply from Nenter. The latter is known for producing vitamin E from farnesene, a set of six closely-related chemical compounds. These compounds are found on the coatings of apples.
The role of China's Nenter in the deal is the provision of production facilities where farnesene-based vitamin E will be produced. These facilities are located in Jingzhou and Shishou, two sites in the Hubei province.
While DSM already has a vitamin E laboratory in Switzerland, the firm took part in the joint venture due to the opportunities it could open up. DSM aims to expand its reach in the Asia Pacific region and China is one of the most secure outlets that could open doors for business in other Asian countries.
A couple of years back, Nenter forged a deal with Amyris, a biotech firm based in California, U.S.A. The deal saw Amyris providing Nenter with sugar-based farnesene. DSM followed suit and in 2017, the firm worked with the American provider to produce vitamin A from farnesene.
As DSM's animal nutrition department continues to grow, the firm seeks to diversify and improve its vitamin E supply chain through the latest collaboration with Nenter, Reuters reported.
DSM is a pioneer of animal feed additives and an international supplier of carotenoids, eubiotics, feed enzymes, and a wide variety of vitamins. In its official press release about the project, the company said, "The joint venture will strengthen DSM's global supply chain footprint, enabling the company to offer locally produced Vitamin E in China and Asia Pacific, next to its facilities in Switzerland."
The Nenter-DSM joint project is expected to close sometime September. As of the moment, both parties are still completing regulatory procedures to ensure that the deal won't encounter future problems.
