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DSM invests in Inner Mongolia hydrocolloids company

15 Nov 2017

DSM and investment company Haixing have acquired a majority equity stake in Inner Mongolia Rainbow Biotechnology, which has been renamed DSM Rainbow (Inner Mongolia) Biotechnology (DRB).

DSM invests in Inner Mongolia hydrocolloids company

DSM and investment company Haixing have acquired a majority equity stake in Inner Mongolia Rainbow Biotechnology, which has been renamed DSM Rainbow (Inner Mongolia) Biotechnology (DRB). Through this acquisition, DSM and Haixing say they will be able to expand their global business of hydrocolloid solutions applied in food, beverage and personal care products to provide texture and stability. The companies plan to meet the growing demand for gellan gum and widen their hydrocolloid product portfolio with the addition of xanthan gum and welan gum

After an injection of new capital, DSM will own 65% of the shares in Rainbow and Haixing 27%. The remainder will be owned by Gu Li Quan, the founder of the company.

DSM and Haixing already have a 60%/40% joint venture in gellan gum, DSM Zhongken Biotechnology (DZK), in Tongxiang, Zhejiang province.

“This is an important strategic investment, which expands both our manufacturing capacity and innovation competences, enabling us to deliver on our strategy to become a leading and fast-growing global natural hydrocolloids produce,” said Weiming Jiang, DSM China President. “DSM Rainbow is uniquely positioned to be a leading producer of high-quality gums, offering sustainable products, which are in high demand by our customers, both in China and throughout the world. DSM Rainbow is located along the China-Mongolia-Russia Corridor of the Belt and Road Initiative, a strategic location for our hydrocolloids business, planted firmly in China with a global impact.”

“Globally, increasing consumer awareness around healthy eating and demand for low-calorie and low-fat food products, coupled with further technological development in the food industry, is expected to have a notable impact on the natural hydrocolloid market growth,” said Xiangwei Gong, President of DSM Hydrocolloids. “By acquiring Rainbow, we will be even better positioned to deliver unique, high-value solutions to our food, beverage and personal care customers worldwide. DRB will work closely with DZK where DSM has also built a world-class innovation center. The site will be temporarily shut down for upgrades. In the coming years, DRB will make significant further investments in the site to increase capacity and strengthen its ability to deliver a secure and sustainable supply of biogums.”

“Since we started the partnership with DSM in 2010, DZK has been expanded and developed based on the global platform of DSM,” said Rongming Wu, Chairman of Haixing. “I am very excited to have Rainbow, a relatively new and attractive player in the industry, joining our dream team. I sincerely hope and believe that we will work together to achieve the goal of building a world-class biogums manufacturing base in Chifeng, Inner Mongolia.”