Louis Dreyfus Acquires BASF’s Food and Health Ingredients Business
Louis Dreyfus, a major player in the food ingredients and agriculture marketplace, has announced its acquisition of German chemicals manufacturer BASF’s Food and Health Performance Ingredients Business. The deal, as stated in a joint statement from the companies, marks a strategic move for Louis Dreyfus to expand its global reach in the plant-based space. Financial terms of the agreement were not disclosed.
The BASF division, known for manufacturing plant-based ingredients and emulsifiers for food formulators, brings with it a production and R&D facility in Germany, along with three other labs. As part of the acquisition, 300 BASF employees will transition to Louis Dreyfus’ operations. This move comes as producers in the food industry continue to diversify their portfolios in response to consumer demand for healthier ingredients.
James Zhou, Chief Commercial Officer at Louis Dreyfus, emphasized the potential for the company to evolve from a raw material provider to a trusted solutions advisor through the acquisition. He highlighted BASF’s portfolio of oils, fats, glycerin, and lecithin as valuable assets that will enable Louis Dreyfus to partner with global customers in creating attractive applications for various sectors, including bakery & confectionary, non-dairy products, instant foods, personal care, and healthcare.
On the other hand, BASF sees the sale of its plant-based unit as an opportunity to redirect its focus towards other areas of growth within the company. Michael Heinz, a member of BASF’s board of executive directors, stated that the plant-based segment is no longer a strategic focus area and has limited synergies within the company’s operations. BASF remains committed to expanding its business in key areas such as vitamins, carotenoids, and feed enzymes.
The plant-based meat segment has faced challenges in recent years, leading companies like Beyond Meat and Impossible Foods to make strategic adjustments to their operations. BASF’s decision to divest its plant-based unit could help improve cash flow by relinquishing a struggling category.
Louis Dreyfus has been actively expanding its presence in the protein ingredients space in recent years. The company established a dedicated business unit focused on pulses, such as beans and lentils, and announced plans to construct a pea protein facility in Canada. These initiatives align with Louis Dreyfus’ goal of enhancing its offerings and strengthening its position in the evolving food industry landscape.
