FMC to acquire Chilean natural color and health ingredients firm

26-Oct-2011 - Last updated on 19-Dec-2023 at 15:43 GMT

FMC Corporation has entered a definitive agreement to acquire Chilean natural colors and specialty ingredients firm South Pole Biogroup, as it looks to expand its food ingredients portfolio.

The company was tipped to be on the lookout for acquisitions back in August, when Specialty Chemicals Group president Michael Wilson said that in order to expand FMC’s portfolio in food ingredients, it was “pursuing several organic and external strategies that would broaden our position into other value-added food ingredients.”

Its Specialty Chemicals Group, FMC BioPolymer, is the world’s leading producer of alginate, carrageenan and microcrystalline cellulose, but the South Pole acquisition presents new markets and applications for the company in natural colors and functional ingredients.

Division general manager at FMC BioPolymer Mike Smith said: "South Pole Biogroup is an innovation leader in the natural color and health ingredients industry. This transaction brings a remarkable portfolio of natural color formulation, product application expertise, and ingredient extraction capabilities to FMC customers and partners around the world."

Natural colors were worth $230m of the United States’ $405m total colors market in 2009, and market research firm Leatherhead predicts that the US market for natural colors will grow to about $265m by 2012.The global market for food colorings stood at $1.45bn in 2009, up 16% from 1.25bn in 2005.

In addition, interest in health and nutritional ingredients continues to increase around the world, in both mature and emerging markets.

"The acquisition of South Pole Biogroup and its franchise businesses – BioColor and BioNutrition – opens exciting new platform opportunities in natural colorants and functional ingredients for FMC BioPolymer,” Smith said.

Prior to the acquisition, the company had said it was looking to apply its applications knowledge in texturants to other ingredients that would move the company beyond texture, and to broaden its capabilities in applications such as dairy and beverage.

Its hydrocolloid ingredients are used to texturize and stabilize a wide range of food products, but they have been sensitive to volatile raw material costs.

FMC said it expects to close the acquisition by the end of the year. It did not disclose terms of the transaction.