The translation effects from a strong Swiss Franc start to have an increasing impact on overall sales figures. Newly signed contracts and pipeline deals in the Custom Manufacturing business confirm an intact trend toward outsourcing. However, volatility is still persistent in the Custom Manufacturing market, as more stringent regulatory product approvals continue to affect the business.
Lonza’s global re-engineering project is on-track, with expected savings at CHF 70-80m to be delivered by the end of Q1 2011. The financial situation is stable, with improved balance sheet structure and free cash flow delivery. All innovation projects continue with strong progress.
Life Science Ingredients experienced normalised market demand, with strong margins in Q3 compared with H1 2010. The business, however, faces increasing price pressure from competition and the Visp site is affected by weaker USD and Euro.
In Nutrition Ingredients, the sales for vitamin B3 for Food and Pharma applications have been strong and the construction of the new niacinamide (vitamin B3) plant in Nansha (CN) has started.
Competitive price pressure is starting to increase, but Lonza is determined to preserve market share. Carnipure and Carniking sales are in-line with expectations and the pre-marketing of the new plants is fully under way.
In Performance Intermediates, the demand for basic chemicals slowed down based on intensified competition and overcapacity in Asian markets. The profitability is lower due to the currency situation in Visp. The sales in Microbial Control were stable in the western markets and continue to grow in Asia. The innovation projects make good progress.
Read the full Lonza financial statement at this link.
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