DSM expects that changing dynamics, especially in China, which are altering the fundamentals in global vitamin markets are likely to be longer lasting
In a recent comment, DSM has pointed to several factors which are forcing structural changes and impacting on the output and costs of some vitamin producers.
DSM say some of their competitors have been affected by additional investments and costs for environmental and quality reasons. Also cited are increases in energy and raw material prices, inflation, privatizations and local exchange-rate movements.
DSM also highlights the fact that market supply is currently tight because of strong market growth in combination with reduced or at best stable capacities. DSM say all these various factors have come together in the last 12 month to result in significantly higher pricing across the vitamin industry.
"It is expected that a large part of these elements are longer lasting structural changes, which gives comfort that the improved profitability in vitamins can be sustained over the medium term, although specific dynamics exist for each individual product and end-market," commented DSM.
Official data from DSM shows that profitability from their entire vitamin business has significantly improved during end Q2 2008 compared to year end 2006.
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