Tel Aviv stock exchange-listed Frutarom Industries has welcomed a new company into its stable - Frutarom Switzerland - previously known as Emil Flachsmann, and by so doing carves itself deeper into the botanical extracts market.
In June this year Frutarom UK - a subsidiary of the NIS470.16 million (€96m) Israeli Frutarom group - agreed to buy 100 per cent of Emil Flachsmann for approximately €20 million.
Announcing the integration of the new Swiss company, Frutarom said this week that over the course of the next few months, the flavour portfolios of Flachsmann and Frutarom will be brought together and 'mutually completed to ensure optimum results'.
But despite the name change, Frutarom will keep up with Flachsmann and EFLA. "The brands 'Flachsmann' and 'EFLA' support the positioning of products on the global market as well as reflecting our active patents policy," said Frutarom in a statement this week.
Flachsmann, which also makes pharmaceutical and nutraceuticals, posted sales of about €30 million in 2002. Under the agreement, Frutarom paid SF21 million (about €15 million) on signing the agreement, and will pay an additional SF1.5 million each year for the next three years. Flachsmann's shareholders' equity stands at approximately €19 million, Frutarom said.
Flacshmann, which has been operating since 1935, is active in Western Europe, including in some markets where Frutarom has a relatively low presence. Flacshmann's extra knowledge, reputation, workforce, output potential, customers and market share will make a substantial contribution to Frutarom's business, the Israeli company added.
For Frutarom the plant extracts operations of Flachsmann hold a particular appeal and a 'very important role'. The company intends to invest in Flachsmann's location in Waedenswil, making it 'an international competence centre for first-rate Flachsmann plant extracts'.
With annual sales in the region of $120 million Frutarom has yet to hit the flavour top ten which saw industry leaders Swiss company Givaudan and US business International Flavors and Fragrances posting sales figures of $1.9 billion and $1.8 billion respectively in 2002.
But, it is on the up. On revenue of NIS139.21million (€28m) for the second quarter of 2003, the Frutarom group saw operating profit rise by 20 per cent to NIS18.23 million (€3.7m), up from NIS15 million for the same period in 2002. Frutarom is a subsidiary of ICC Industries, a private US company owned by Dr John J. Farber.
Frutarom shares were up 1.5 per cent at NIS 11.86 by close of TACT trading on 29 August.