The Danish ingredients giant recorded ‘solid’ growth in the first half of financial year 2011/12 with overall revenues hitting US$435.1m (€332.5m), up 9% from the same period in the previous year.
The Asia Pacific, Middle East and Africa (APMEA) region saw a sales surge of between 11-13%; a growth Lars Frederiksen, CEO of Chr Hansen, said was mainly from Asia as “presence in Africa and the Middle East is pretty limited.”
Asia represents a “substantial chunk” of business representing 18% of the company’s global sales; a fifth of business, Frederiksen told FoodNavigator-Asia.
“It is an extremely important market,” although one in which the company is still relatively novel, he added.
Natural colours continue to see strong growth across the region, with demand on a par with US and EU markets, the CEO said.
“Being careful about what they eat has been part of a cultural heritage for many, many years and so there is a high demand for natural colours,” he said.
Growth in this area is also being driven by consumer concern for food quality, he said.
Industrialisation pushing ‘healthy’ sales
Population increases and improved standard of living is of course driving regional growth and at a rate five times or even tenfold that of Europe and North America, Frederiksen said, “but it is also a case of what we call conversion – that is the industrialising of processes. It’s a move away from home-made and traditional preparations.”
He noted that the cultures division has benefited from this shift, namely fermented milk, as “it is increasingly a sign of wealth to buy such products,” rather than make them at home.
Innovation is also driving development with “huge interest for new products with interesting tastes, colours and features,” he said.
In addition to natural colours, health and nutrition holds growth potential due to it being a smaller sector, and “true value will be realised from cultures and dairy,” Frederiksen said. In particular, probiotics for human health in the form of powders and capsules is performing well in India, China and Japan, he added.
Breaking down the giant
Asia is a vast region with differing markets, he noted, and so “in terms of application and execution of strategy it has no meaning whatsoever to look at Asia from a regional perspective. You have to break it down.”
Chr Hansen manages Asian operations from its headquarters in Singapore and has country managers and industry technology centres in major markets to drive operations at a local level, he said.
But in terms of production at a local level, Frederiksen said there are no plans to invest in production in Asia as “for the time being, we don’t see any benefits of production in Asia.”
The ingredients firm has a small colour production site in China, but aside from that manufactures products in the EU and North America.