2024 Highlights
In 2024, our Capsules & Health Ingredients division continued to maintain its leading position in Hard Empty Capsules (HEC), Dosage Form Solutions, and Health Ingredients in a challenging market environment. The HEC market has recovered at a slower than expected pace, while the pharmaceutical HEC market correction has been deeper and longer than anticipated. As a result, over the past couple of years, we have focused on optimizing our cost position in the short term through operational excellence in manufacturing, which has led to improved efficiencies, and cost-saving initiatives across all functions and regions. These efforts have partially offset the margin pressures caused by lower industry utilization.
In this context, we have taken further measures to optimize our production network, including the planned decommissioning of the Jakarta (ID) site in mid-2025, the closure of production lines at our capsule plants in Western markets, and targeted capital investments to expand production capacity with additional lines in China and India. Furthermore, in 2024, we invested significantly into the long-term competitiveness of our business. We saw a positive early impact of our newly-introduced superior proprietary D90 capsule manufacturing technology.
Process Innovation
Leveraging our in-house design, technical, and engineering teams, we advanced the development of our next-generation proprietary hard empty capsule manufacturing technology. The first full production line became operational in Q1 2024. This new technology has increased individual line capacity by 15% while concurrently reducing weight and dimensional variability. It is also reducing our net carbon footprint and establishing a new product quality standard. Following the successful installation of the first line, we have initiated the roll out of this new technology across our manufacturing network, which will take several years.