Spice demands: Frutarom doubles capacity in Germany

01-May-2013 - Last updated on 02-May-2013 at 10:47 GMT

Spice demands have prompted Frutarom Savory Solutions to almost double German capacity

Frutarom Savory Solutions, a division of Israel-based flavours giant Frutarom, is doubling capacity in Sittensen, Germany, to meet growing demand for savoury flavours from Germany and Eastern Europe.

Commercial vice president Nick Russell said the company is ramping up capacity to 10-12,000 tonnes, almost double existing levels, because of increasing demand for the company’s spices. The firm manufactures spice blends and seasonings for processed meats such as hams, sausages and salamis, as well as ready meals and convenience foods.

“These markets are growing rapidly, with increased demand from Germany and Austria,” he told FoodNavigator.com. “But the real growth is in Eastern Europe, in countries like the Ukraine and Russia.”

The company is not disclosing how much it is investing in the site but will focus on improving automation, blending capacity, logistics and warehousing at the site. The work will be completed by the end of the year, so within a “fairly short timeframe” and will create an additional 20 jobs on the production floor, said Russell.

The acquisition trail...

Russell said Frutarom Savory Solutions is the largest division of Frutarom and as well as targeting growth in Germany and Eastern Europe, the division supplies companies in Israel and Asia. And two years ago the division turned its focus northwards when it acquired a Scandinavian firm to get more access to business in the region, he added.

In 2011, the company announced the acquisition the industrial savoury spice division of Reiber & Son ASA for approximately US$4.2m (25m Norwegian Krona). The acquisition of Rieber Industrial Spices Savory, which also makes flavours and seasonings for processed meats and convenience foods, came hot on the heels of Frutarom’s acquisitions of the savoury activity of Chr Hansen in 2009, and Gewuerzmueller and Nesse, acquired in 2007 and 2006, respectively.

At the time, the group’s president and CEO Ori Yehudai said that Frutarom had identified the savoury sector as an important growth area, explaining that the market is growing as consumers increase their consumption of processed and convenience foods, both inside and outside of the home.

In total, Frutarom has made eight acquisitions since 2011, which contributed $115.5m in sales.

For the full year 2012, the company reported a 19.2% increase in revenue to US$618m and net profit rise of 23.7% to US$52m. In the fourth quarter, revenue totalled $144.9m, a 10.1% increase, while net profit hit $10.5m, up from $7.9m in 2011.

Last month, Yehuddai said the firm will continue investing in emerging markets, including Asia, Central and South America, Central and Eastern Europe and Africa. Some 36% of Frutarom's business is now conducted in emerging markets, up from 27% in 2010, he said.