NETHERLANDS- Corbion has unveiled a restructuring plan involving the consolidation of its business units and a reduction in its workforce. The decision was disclosed during a capital markets update held on January 31 in Amsterdam.
Corbion’s restructuring plan includes simplifying the company’s structure by consolidating its three existing business units into two distinct segments: functional ingredients and solutions, and health and nutrition. This realignment aims to streamline operations and achieve significant free cash flow delivery, facilitating leverage reduction.
As part of the restructuring, Corbion will reduce its workforce by approximately 200 employees, spanning all functions and regions. This initiative is expected to reduce complexity and enhance overall efficiency.
The company also announced the closure of a fermentation plant in Peoria, Illinois, citing the operationalization of a new Thai lactic acid plant and a strategic decision to discontinue lactic acid fermentation in Spain.
Corbion provided unaudited financial results for the fiscal year 2023, aligning with previously communicated expectations. Sales for the year amounted to €1.44 billion (US$1.57 billion), with adjusted EBITDA reaching €192 million (US$208 million). Audited results for the fiscal year are scheduled for release on March 1.
The functional ingredients and solutions business unit will encompass food, biochemicals, and polylactic acid (PLA) businesses, constituting 81% of Corbion’s portfolio. The health and nutrition business unit will focus on nutrition, pharmaceuticals, and biomedical polymer capabilities, accounting for the remaining 19%.
Olivier Rigaud, Chief Executive Officer of Corbion, expressed the company’s commitment to a simpler, more efficient organization and highlighted the goal of achieving annualized cost savings of around €55 million (US$59.7 million) through the restructuring program.
“With the new Thai lactic acid plant becoming operational this year, we’ve decided to stop the lactic acid fermentation in Spain,” Rigaud explained. “However, we are continuing the production of food fragments and other derivatives in the Spanish facility, but as a consequence, we are mothballing our US operation.”
Corbion remains dedicated to its PLA business, anticipating growth in the biobased plastics market, which is expected to increase from less than 1% to 10% by 2050. Rigaud highlighted the company’s global expansion plans, particularly in Asia and Southeast Asia, emphasizing the successful adoption of natural preservatives.
The divestiture of Corbion’s emulsifiers business is set to conclude in the second quarter, with a shift towards enzyme blends for extending the shelf life of baked foods.
The health and nutrition business unit, constituting 19% of Corbion’s core portfolio, is targeted for high growth and high-margin opportunities. Rigaud emphasized the company’s commitment to the algae ingredients business, projecting significant sales and adjusted EBITDA figures by 2028.
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