Galam to collaboration with Czech liquid sweetener player

09-Nov-2010 - Last updated on 09-Nov-2010 at 09:10 GMT

Galam Group has signed an agreement with Czech company VUC Services to develop new liquid sweetener blends, as part of its strategy to spread its reach into new European markets.

The Israeli company is pursuing a strategy of extending the reach of its liquid sweetener business in Europe. In 2004 it formed a subsidiary in Germany called Eurosweet, and in October 2007 it bought a 51 per cent share in Spanish liquid sweetener and liquid sugar firm Atomer. The remaining shares in Atomer were acquired earlier this year.

The agreement with VUC Services extends its reach into the Czech Republic and neighbouring markets such as Slovakia. “It will bring better coverage of the European continent,” Alon Heyman, VP of marketing at Galam Group, told FoodNavigator.com.

He emphasised that Galam has not bought any shares in VUC services, but the agreement covers collaboration only. It does not affect any other partnerships Galam has in the Central and Eastern European region.

The two companies will work together on sweetener blends in response to customer requirements, but they will not work on basic R&D to discover entirely new sweeteners per se. “It is more on the application side than classic R&D,” Heyman said, adding that there are a broad range of possible applications, including dairy, bakery, beverage and ice cream products.

One of the big opportunities is in stevia, which is expected to be approved for use in the EU in 2011. Galam has an agreement with Corn Products International to supply its branded stevia in Europe. “If you want to keep it [stevia] natural, you have to combine it with sucrose or crystalline fructose. We believe stevia does not stand alone because of the aftertaste,” he said, “but you can reduce sugar or calories by up to 50 per cent”.

Value for mixes

Heyman said that offering liquid sweetener blends is an added value for customers, as they tend to be looking to out-source blending work.

“We blend and they add one or two ingredients,” he said, “so it is not necessary for them to do the whole process of measuring quantities. They want to concentrate on their core business”.

For VUC Services, there will also be benefits in being aligned with a bigger group. For instance, at next week’s HIE trade show in Madrid VUC will be exhibiting as part of the Galam Group booth.

VUC Services was created in 2002 to fill a gap in the Czech market for liquid sweeteners following the restructuring of services of the Sugar Research Institute of the Czech Republic and Slovakia.

Step-by-step strategy

Heyman said the company has some ideas about new directions for expansion within Europe, but nothing concrete at present. The idea is to act step-by-step – and it may be ready for the next step in one or two years.