Frutarom buys Belmay, becomes UK flavour leader
a strategic move said to position it as the leader in UK flavours
and bolster its global position in the market.
The Israeli flavours and fine ingredients firm presently has a rapid growth strategy in place, and the Belmay acquisition, for a cash payment of US$17.1m (c €12.8m), follows its acquisition of Acatris Health in October 2006 and before that the savoury solution activities of Nesse Group (70 per cent of the share equity).
In terms of Frutarom's flavour capabilities, Belmay will increase its technological know-how and its product portfolio, especially in soft drinks and alcoholic beverages and with a particular emphasis on natural ingredients.
In addition, the company will benefit from additional R&D personnel - not least in the important area of organics; Belmay recently established a dedicated research department to develop organic products.
Belmay's UK site, which has "significant production capacity", is situated close to Frutarom's own premises in Kettering.
It also has subsidiaries in Singapore, Norway and Denmark.
Belmay's management team will be incorporated into Frutarom's, and they will lead the UK operation together.
Frutarom president Ori Yehudai said: "Thanks to Frutarom's proven experience in making acquisitions and in realising the synergy and cross selling opportunities, we are convinced that this acquisition will benefit Frutarom's continued fast growth and and profitability and will create added value for our customers, our employees, and our investors."
Once Frutarom has completed a review of its own and Belmay's operations in various countries, it expects synergies to result in annual operational savings in the region of $3m (c €2.25m).
In 2006, Belmay saw sales of around $15.1m (c €11.3).
Two weeks ago Frutarom reported sales of US$287.2m (c €215m) in full year 2006, up from $243.8 (c €183m) in 2005.
Operating profits for the year increased 12.9 per cent over 2005 to $37.1m (€27.8m)
In addition to being the company's seventh consecutive year of growth, 2006 will also go down in company annals as the year when it was in a position to claim it had achieved its aim of becoming one of the top ten flavour companies in the world.
