Rising competition cuts into Borculo margins
to process less whey, hit first half figures for Dutch ingredients
firm Borculo Domo.
Part of the Meppel-based dairy group Royal Friesland Foods, the whey ingredients unit said that net turnover had dropped by 8 per cent, mainly attributable to the policy of processing less whey from other companies.
"Before we took on and worked with whey from a number of cheese producers - particularly Dutch and German - but now we only want to invest in our own whey from the group,"a spokesperson for the ingredients firm said to FoodNavigator.com.
Reflecting a trend in the food ingredients industry, Borculo Domo has adopted a strategy to focus on value-added products, such as whey protein isolates, concentrates and milk calcium, to up margins.
And the growing market for new functional foods and drinks, particularly adult and sports nutrition products, has opened up such opportunities, leading to increased usage of whey protein concentrates and isolates.
According to a recent report from Zenith International, in 2002 consumption in West Europe edged up to nearly 770,000 tonnes for sweet whey, demineralised whey, whey protein concentrates (WPC) and whey protein isolates (WPI).
The growing global production of cheese has generated ever-growing quantities of whey solids and to maximise the overall profitability of cheese and whey solids, the food industry is constantly on the look out to find new ways of process innovative high value-added whey derivatives - a trend equally applicable to both the protein and lactose part of whey solids.
"We want to invest in added-value products - moving further into pharma and food, and less in feed," said the spokesperson for the firm, which is particularly active in the demineralised category
Infant foods is an area generating decent growth for the firm, with sales of biofunctional ingredients to the industry continuing to rise in the Benelux, Greece and South East Asia geographical zones in particular.
Increased competition influenced prices gained for products from Borcuolo Domo with the firm stating in the first half results released today that selling prices for standard products were lower compared to the same period of 2003.
Whey ingredients suppliers in Europe include French company Euroserum, Danish firm Arla Foods and BBA Lactalis. Dutch DMV, French group Lactalis and Irish company Glanbia are also involved.
Net profit for Royal Friesland Foods increased by 9 per cent to €35 million for the first half of 2004.
