Manufacturing & Supply Chain

Frutarom Industries, one of the world’s ten biggest companies in the flavours and fine ingredients industry, is continuing to implement its rapid and lucrative growth strategy, following its fourth acquisition in 2013. Frutarom is purchaing US-based Hagelin for a cash consideration of $52.4 million.

This acquisition strengthens Frutarom’s foothold in the US market, which is the world’s biggest flavour market, and accelerates its penetration into the developing and fast growing markets of Central and South America and Africa, which are of high strategic importance to Frutarom. The acquisition substantially expands Frutarom’s business activity in the growing and profitable beverage flavours sector. Frutarom has completed four acquisitions in 2013, with a total sales turnover of $147 million in 2012, investing a total of $120 million.

Established in 1967 and employing 84 people, Hagelin is engaged in the development, production and marketing of flavours and unique flavour technologies for the food industry, with an emphasis on the growing sector of beverage flavours. Hagelin’s sales turnover totaled $24.2 million in 2012, up 7% from 2011.

Hagelin specialises in the development of advanced flavour solutions for the reduction of salt, sugar and calories and improvement of the taste experience. This acquisition expands Frutarom’s global range of advanced products and technologies, which also covers soft drinks, functional drinks (which offer nutritional value), alcoholic beverages, and savory solutions (the non-sweet spectrum).

Hagelin’s customer base includes leading international food and beverage manufacturers and local food and beverage manufacturers in the US, the UK, and in developing markets such as Central and South America and Africa, which have experienced high growth rates. This acquisition is expected to expand Frutarom’s customer base, while creating many cross-selling opportunities.

Hagelin has three R&D, production and marketing sites, two of them in the US and one in the UK.

“The acquisition of this lucrative company will intensify Frutarom’s technological capabilities, especially in the growing and profitable beverage flavors sector, and adds to its R&D capabilities, sales and marketing infrastructure and cross-selling opportunities,” says Ori Yehudai, president and chief executive of Frutarom. “This acquisition is yet another step in the growth of Frutarom’s profitable flavour business in the US, a market we identified as a key strategic target.”

Frutarom’s other acquisitions in 2013 were JannDeRee in South Africa, PTI in Russia and Aroma in Guatemala. This follows eight acquisitions between January 2011 and January 2012.