DSM resists the impact of rising input costs


By Rod Addy

- Last updated on GMT

Related tags: Dsm nutritional products, Sustainability

Ingredients prices could impact on the entire food supply chain if production costs keep rising, according to Gareth Barker, head of marketing, human nutrition and health at DSM.


"If oil prices double, that will impact across all ingredients. You also have the rising costs of raw materials and energy."

Prices declined for many years in the industry as supply outstripped demand, he said.

"They came down to uncomfortable levels, so some exited the [ingredients] business. Then demand exceeded supply. That has been exacerbated by raw material and oil increases as well."

However, Barker cautioned against painting too gloomy a picture of the future. "Looking forward, prices will remain relatively stable and there will always be some that will decrease. Overall, I think we will see prices remain sustainable."

He said some ingredients would rise in price more than others over time. "There are some differences between ingredients, but there are not going to be huge increases."

Oil price rises would exert upward pressure on input and production costs, but he said DSM was working to cut costs and improve efficiencies.

In particular, DSM's drive towards sustainable practices was an important solution. "Sustainability is very high on DSM's agenda," said Barker.

He referred to DSM's profile in the Dow Jones Sustainability index, which ranks companies by their sustainable practices. "We want to see 80% of DSM products on an eco-footprint scheme that will account for our carbon emissions and water footprint.

"We are reducing our eco footprint and looking to increase our use of renewable energy. There's also more potential for reducing the carbon footprint of products in our portfolio."

DSM Nutritional Products is one of 12 trailblazing firms to have been awarded a Carbon Trust award for sustainability for its work at a dairy plant in Scotland.

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