April 20, 2021

lieverthuis

affection for others

Balchem to invest US$5m to expand animal nutrition manufacturing facility

The financial outlay is expected to extend the facility headcount by six over the next two years.

The enlargement of the plant, which began operating in 2013, will double the production of key nutrients used for the animal nutrition and health markets worldwide. The company expects the project to help it meet increasing demand for such ingredients globally. 

Balchem, which specializes in choline production and encapsulation technology, said it worked with local regional partnership boards and officials in support of the expansion.

Record animal nutrition sales

The company typically targets the dairy, poultry, swine, pet food and aquaculture markets.

It posted record animal nutrition sales in its Q4 2020 financial results, released in February this year. The segment generated record quarterly sales of US$50.9m, an increase of US$2.4m or 5% compared to the prior year quarter. The increase was the result of higher sales in the ruminant species markets and a favorable impact related to changes in foreign currency exchange rates.

However, fourth quarter earnings from operations for this segment of US$8.5m decreased US$1m or 10.1% compared to US$9.4m in the prior year quarter, with the company saying that development was due to a lower gross margin in the monogastric business unit, primarily as a result of  certain higher raw material costs and manufacturing inefficiencies arising out of the COVID-19 pandemic.

Excluding the effect of non-cash expense associated with amortization of acquired intangible assets of $0.2m for Q4 2020 and 2019, adjusted earnings from operations for this segment were US$8.7m compared to US$9.6m in the prior year quarter.