The ingredients for success K+S Kali

The plant Zielitz in Saxony-Anhalt produces high-purity potassium chloride. This picture shows the production site for KaliSel.

THE INGREDIENTS FOR SUCCESS

K+S Kali GmbH is a globally recognised name in the extraction and processing of potassium and magnesium for a wide range of applications including Health Care and Nutrition, the subject of this article. In a conversation with Alexander Baart, VP and head of Health Care and Nutrition, Victoria Hattersley finds out about what makes this division unique within the group and how it is keeping pace with market trends and the regulatory challenges of this sector.

WE all need to maintain certain levels of potassium and magnesium in our bodies in order to remain healthy, and that is where companies such as K+S Kali with its world-leading Health Care and Nutrition division come in. Producing the highest quality food grade potassium chloride and magnesium sulphate for the pharma, food and feed industries, the company strives to consistently meet the highest standards and the most stringent regulations, as we shall see.

But to give some context to this division: it is still a small part of the global giant that is the K+S Group. Headquartered in Kassel, Germany, the group has a long and distinguished history in mineral extraction and processing reaching back over 150 years. The natural crude salts it mines are extracted and processed into high purity salts at its sites in Wintershall, Hattorf and Zielitz.

The K+S Group consists of two separate business units – one salt and the other Kali. In fact, it is today the biggest worldwide producer of salt, with Kali among the biggest producers of potassium chloride. The biggest part of the group’s turnover is still accounted for by its traditional fertiliser business. The Health Care and Nutrition element of the business is therefore a small part of the group, but one that is experiencing healthy growth nonetheless. The food, feed and pharma products are produced in K+S Kali’s own, completely independent manufacturing facilities.

Mr Baart begins: “This division was established four and a half years ago so we are still relatively young. K+S Kali GmbH produces 6.8 million metric tonnes of potassium chloride and magnesium sulphate per year. Of course we are working with far smaller numbers within the domain of food, feed and pharma so we are just an island within the bigger group structure and rely on it for our continued stability.

With large-sized machines the raw salt is transported to the belt conveyor systems. From there it takes its journey to the shaft and to further processing in the factories above ground.

“What many people don’t know however is that the group also has three salt production companies: one of these is esco in Europe, the second is K+S Chile and the third – probably the best-known – is Morton Salt in the US. This means we actually have a two-pillared business model: K+S Kali and the salt companies.”

Products and industries served

In essence, the production profile of K+S Health Care and Nutrition is relatively simple: it sells high-purity potassium chloride, magnesium sulphate (also known as Epsom Salt) and potassium sulphate products for the food and pharma industries. For the feed sector it relies on potassium chloride and magnesium sulphate, which are marketed under the KaSa brand name.

As Mr Baart explains, “Our actual products don’t change very much because for our customers – particularly those in the food industry – consistency is very important. They don’t want to have to keep reformulating their products and neither do we.”

Of course, the products themselves do vary according to the end use sector. To give an example, Mr Baart tells us, “The interesting thing is that if you make a comparison between animal food and human food products, in theory there are far stricter certification procedures for animals. I say in theory, because in practice what you will often find is that many producers will try to cheat the system which nobody would ever risk doing in the food business or the pharmaceutical segment.”

Regulatory challenges

This last point brings us to one of the biggest challenges companies operating in this sector worldwide will face: that of meeting all the regulatory and quality standards required for the pharma, food and feed industries. It is here that K+S Kali Health Care and Nutrition is able to distinguish itself. It is unique within the group structure in that it is in the only member to take control of its own regulatory and technical affairs in addition to sales. It will, for example, coordinate with auditors – and indeed its clients are welcome to carry out their own audits of its facilities whenever they like. Furthermore, it can assist clients with their documentation to ensure that their own products meet the required standards.

Mr Baart explains why this is such an important strength: “We have to make sure that all our products are up to standard for each and every market we serve. Different regions of the world have different requirements: for example, if you are exporting to the Far East there are many, many registration processes to go through and it makes much more sense for us to coordinate this together with our partners (end users and/or distributors) to avoid any costly complications for all involved.”

All K+S Kali’s facilities operate according to the most stringent hygiene and quality controls, with closed production systems to protect its salts against environmental influences during the manufacturing process. Furthermore, it constantly tests the purity of its products at its own laboratories. The Darmstadt Regional Administrate Council and the US Food and Drug Administration regularly carry out inspections at its site and the SGS Institut Fresenius audits its KaliSel in accordance with IFS. Furthermore, the animal feed salts are certified in accordance with GMP+ and are QS-recognised.

“You need to meet international standards in such a way that you can get through any audits necessary. This is something we as a company take extremely seriously because, in short, we have to if we want to survive and maintain the strong reputation of the group as a whole.”

Current and future trends

We go on to discuss the increasing trend for food manufacturers to reduce the sodium content of their products. This is an issue that most of us are aware of today, but how does it affect companies such as K+S Kali? Mr Baart tells us, “Six years ago we invested in our Zielitz site which produces crude salt to be refined into highly pure foodgrade potassium chloride. At the time the discussion of low sodium in the European food market was at a relatively low level so when our division was established I questioned whether we would get near to half capacity at this site. Well, four and a half years on we are seeing roughly a two-digit increase each year.”

It looks, then, as though low sodium food production is here to stay: major food processors throughout Europe are now committing to reduce the salt content of their food by 3-5 per cent, and whilst Mr Baart doesn’t want to name names he says K+S Kali is getting into dialogues with many of them about how to meet increasingly stringent market demands. (In the US, meanwhile, companies have been lowering the salt content of their food since the 1970s and consequently this has always been, and remains, a very important market).

“Of course,” adds Mr Baart, “Any company seeking to reduce sodium, wherever they are, has to consider the entire formulation of their product into their hands so they need a supplier like us who can provide a consistent level of quality. For example, the entire Dutch bakery industry has reduced its salt content by over 25 per cent in recent years and that’s OK, but if you go much lower you may have to look to replace the sodium with something else, as sodium’s role is definitely not limited to the taste only.”

Which brings us on to a second, emerging health trend that companies such as K+S Kali are observing – that of products ‘enriched with natural minerals’ such as potassium. “Just to give an example,

View into the production line of high-purity potassium chloride of plant Zielitz.

Alexander Baart, Vice President – Head of Unit Health Care & Nutrition of K+S KALI GmbH

I was in a US supermarket recently and I saw a can with ‘potassium enriched’ on the label. So maybe the focus is starting to be on not just what you need to cut out, but what you need to include in your food.” Naturally K+S Kali can expect to take advantage of this burgeoning aspect of the food production market in the coming years.

Increasing global presence

In terms of market outreach, K+S Kali’s traditional markets of Europe and the US are still very important. In Europe it has a particularly strong presence in the UK, Scandinavia and the Netherlands, with up-andcoming markets including the Mediterranean countries and France, where the processed food business is increasing rapidly. “On the other hand,” adds Mr Baart, “there is something of a standstill on the domestic German market because at the moment producers here just aren’t interested in reducing sodium.”

The company is also seeing growth in South America, where the diet salts business is growing very fast. Apart from this, Mr Baart says that the situation in the Far East is changing in a positive way. “In fact, our main competitors have tended to be companies in places such as the Far East which produce lower quality, non foodgrade products more cheaply because the regulations are not nearly as strict. However, that is at last beginning to change with markets such as China becoming more quality minded, particularly as more and more global names are starting to produce or sell there.”

When asked about the future direction of the company and whether there are any acquisitions or long-term business partnerships in the pipeline, Mr Baart concludes: “Moving forward, we are not necessarily thinking about acquisitions. We are looking instead at building strong partnerships. We don’t have an aggressive strategy but we are looking for synergies. Already we have existing collaborations with companies who are distributing our products and we are in discussions with more partners in the Far East and South America.” n