10 Associates and joint arrangements
Associates and joint ventures
The following table analyses, in aggregate, the carrying amount and share of profit and other results of associates and joint ventures.
Balance at 1 January
Balance at 31 December
The joint venture POET-DSM Advanced Biofuels has decided to pause production of cellulosic biofuels and shift its activities to R&D. These activities will focus on improving operational efficiency to create licensing technology which supports the use of low-carbon fuels from crop residue and other biomass products. This strategic reorientation is mainly driven by the stalling of developments in US environmental policies.
Other results related to associates and joint ventures includes the excess part of dividend received from an associate beyond its investment amount. As DSM holds no obligation to fund beyond its original investment, no provision should be recognized and the excess part of €28 million is recognized in the income statement.
With the acquisition of Yimante Health Ingredients (Jingzhou) Company Ltd. in 2019 (see Note 3 'Change in the scope of the consolidation'), DSM also indirectly acquired 25% of the shares of Nenter & Co., Inc. (Shishou). The initial value of this investment amounts to €22 million and has been recognized under 'Acquisitions'.
The fair value step-up of €26 million and the consolidation changes of -€66 million both relate to the acquisition of Andre Pectin (increase in share from 29% to 75%). Prior to the acquisition, the value of the associate was increased by €26 million to reflect the fair value. The fair value of €66 million was brought in as part of the consideration of the 75% share in Andre Pectin. See also Note 3 'Change in the scope of the consolidation'.
Transfers includes the change of an Other participating interest to an associate, due to an increase of DSM's share in the company. See Note 11 'Other financial assets'.
In 2017, DSM and Evonik established Veramaris, a joint operation for omega-3 fatty acid products from natural marine algae for animal nutrition. DSM Nutritional Products and Evonik Nutrition & Care each hold a 50% share in the joint operation. In 2019, the commercial-scale USD 200 million facility located in Blair (Nebraska, USA) opened. The joint operation is headquartered in Delft (Netherlands).
In 2019, DSM and Cargill established Avansya V.O.F., a joint operation in which DSM and Cargill each hold a 50% share. Avansya started production at the first commercial-scale fermentation facility for stevia sweeteners in the US. The facility produces EverSweet™, a non-artificial, zero-calorie stevia sweetener. The USD 50 million fermentation facility is located in Blair (Nebraska, USA) and is operated by Cargill. The joint operation is headquartered at the Biotech Campus Delft (Netherlands).
DSM accounts for the assets, liabilities, revenues and expenses relating to Veramaris and Avansya V.O.F. in accordance with IFRS 11 for joint operations.