Layn, the Chinese natural health products manufacturer, announced that it has signed a new agreement for a five-year collaboration with Dsm-Firmenich with a cumulative target revenue of up to $840 million.
On June 19th, Guilin Layn Natural Ingredients Corp. (Layn) announced that it has signed a significant contract with Dsm-Firmenich to extend its daily operations.
According to the announcement, on June 16th, 2023, the two companies signed a new agreement for a five-year collaboration. The cumulative target revenue (CTR) under the agreement is USD 840 million, with a minimum cumulative target revenue (MCTR) of USD 680 million. The agreement is valid for five years.
Public information shows that Layn primarily engages in the production and operation of natural health products, focusing on the extraction of functional plant ingredients. The company has successfully developed over 300 standardized plant extract products, including Luo Han Guo extract, stevia extract, industrial hemp extract, tea extract, and other health and skincare extracts, such as Rhodiola extract and Centella Asiatica extract. Its upstream industry mainly involves agriculture, while its downstream products are used in industries such as food, beverage, medicine, health products, cosmetics, and animal feed.
After signing the agreement, the two parties will deepen their cooperation in three main areas. Firstly, the new contract revises and expands the definition of relevant products. The “products” specified in the agreement not only refer to sweeteners but also to formula products and flavor components composed of relevant sweeteners. Additionally, the agreement also includes two categories of “new products” and “other products.”
Secondly, the cooperation areas will be expanded to include the development of future markets such as flavors and fragrances, animal nutrition, pharmaceuticals, and beauty.
Finally, a joint technical team will be established to provide targeted solutions and services for Chinese customers and markets. The team will report to the cooperation executive committee (a committee composed of three members nominated by each party as agreed in the main contract) every quarter. Dsm-Firmenich will appoint a representative from China or another region to join the team.
Notably, Layn achieved operating revenue of RMB 1.401 billion in 2022 ($195.76 million), a year-on-year increase of 32.99%, and a net profit attributable to shareholders of 179 million yuan ($25.01 million), a year-on-year increase of 50.92%. The revenue from the company’s plant extract business was approximately RMB 1.269 billion ($177.31 million), a year-on-year increase of 28.53%.
On 09 May, Dsm-Firmenich announced the merger between DSM and Firmenich was completed. The newly founded DSM-Firmenich is divided into four high-performing businesses, namely Perfumery & Beauty, Taste, Texture & Health, Health, Nutrition & Care, and Animal Nutrition & Health, all built on complementary scientific research and manufacturing capabilities.
In the fiscal year 2022, DSM and Firmenich generated sales revenue of $9.22 billion and $5.31 billion respectively, resulting in a combined annual sale of $14.53 billion. This merger positions the new company to become the world’s leading enterprise in the fragrance and flavor industry, and the largest merger in the cosmetic ingredients sector this year.
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