N. American impact on Chr. Hansen ingredients

Chr. Hansen - Food Ingredients saw net sales rising by five per cent in Europe, South America and Asia/Pacific for the first quarter ending 30 November 30, 2002 but plunging by six per cent in North America. The overall impact - the combined organic growth rate reached 0 per cent.

According to the company the low organic growth reflects a temporary stagnation in the ingredients market resulting from inventoryadjustments and the negative trend of the global economy.

In addition, the Danish company added that the weak organic growth inNorth America in particular was affected by two factors - the rationalisation of its product range and the fact that a partnership agreement with Dutch company DMV concerning specialtyproducts for the pharmaceutical industry stoppedfrom 1 September, 2002 and was not replaced by a new agreement with US company Foremost Farms until 1 December, 2002.

As exchange rates fell 9 per cent in the period, total sales fell to DKK 867million from DK 948 million in 2001/02. Sales in the European region were DKK 399 million in 2001/02 and DKK 400 million in 2002/03. On a positive note, the company reported that sales of cultures for the food industry, the agricultural industry and the health food industry continued to show satisfactory growth. In addition, sales of CHY-MAX fermented rennet enzymescontinued to increase, which had a favourableimpact on earnings.

In natural colours, several raw materials showed falling prices, which spilled on to the prices of finished products, resulting in a slight fall in sales.

Sales to the Russian and Eastern EuropeanMarkets continued to perform well, particularlydriven by sales to the dairy industry and themeat-processing industry.