AMSTERDAM — Reorganizing at Corbion will involve simplifying the company’s structure into two business units from three business units and reducing its workforce by about 200, which will include closing a fermentation plant in Peoria, Ill. Executives gave details Jan. 31 in Amsterdam during a capital markets update for analysts and investors.

Corbion executives also gave unaudited financial results for 2023 fiscal year. Sales in fiscal 2023 totaled €1.44 billion ($1.57 billion), down from €1.46 billion in fiscal 2022, while adjusted EBITDA was €192 million ($208 million), up from €184.4 million.  Audited results for the fiscal year will be released March 1.

Food, biochemicals and the polylactic acid (PLA) businesses will make up the functional ingredients and solutions business unit. Nutrition, pharmaceuticals and biomedical polymer capabilities will make up the health and nutrition business unit. Corbion’s previous business units were sustainable food solutions, lactic acid and specialties, and algae ingredients.

“Although we see a sequential improvement in some of our key markets, we have embarked on a restructuring program, designed to achieve significant free cash flow delivery and enabling leverage reduction,” said Olivier Rigaud, chief executive officer. “We have developed a simpler, more efficient and focused organization consisting of two business units and will implement appropriate measures to deliver annualized cost savings of around €55 million ($59.7 million).”

The workforce reductions further will reduce complexity and maximize efficiency, and the reductions will span all functions and regions. One-time severance costs related to the restructuring program will be in a range of €15 million to €20 million, Corbion said.

Rigaud spoke about the decision to close the Peoria plant.

“With the new Thai lactic acid plant becoming operational this year, we’ve decided to stop the lactic acid fermentation in Spain,” he said. “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.”

The functional ingredients and solutions business unit makes up 81% of Corbion’s portfolio with sales of €1.02 billion in 2023. Food accounted for 76% of the unit’s sales.

Corbion’s divestiture of its emulsifiers business should be completed in the second quarter. Rigaud said Corbion is using enzyme blends instead of emulsifiers or other hydrocolloids to extend shelf life in baked foods.

“I think the key for us as well is to reproduce the successful US model into new geographies,” he said of natural preservatives. “Although we've made very strong progress in Latin America over the last couple of years, there is still a lot more opportunity. I’m thinking about primarily Asia and Southeast Asia going forward.”

Corbion remains committed to the PLA business, Rigaud said. Corbion is in a joint venture called TotalEnergies Corbion that operates a PLA production facility in Rayong, Thailand. The biobased plastics market made up less than 1% of the total plastic market in 2023, but Corbion expects it to increase to 10% by 2050.

The health and nutrition business unit makes up 19% of Corbion’s core portfolio with sales of €245 million in 2023.

“This BU (business unit) is about focusing on this high growth and high margin business,” Rigaud said.

Within health and nutrition, Corbion expects its algae ingredients business to reach sales of €200 million and adjusted EBITDA of over €40 million by 2028. In 2023, sales were under €100 million, and EBITDA was €12 million. Volume/mix increased over 40% in 2023, Rigaud said, adding the algae ingredients business, already active in aquaculture, is expanding into pet nutrition and human nutrition.