Frutarom to buy Chr. Hansen savory unit in Germany

by Eric Schroeder
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HAIFA, ISRAEL — Frutarom Industries Ltd. reached agreement to acquire the Savory Functional Systems activities and assets of Chr. Hansen A/S in Germany for $7.3 million. The unit had fiscal 2008 (year ended Aug. 31, 2008) sales of approximately $7.7 million, and in the last nine months had sales totaling approximately $7 million.

The Savory Functional Systems unit produces and markets savory solutions such as flavors, seasoning compounds and functional ingredients for the food industry, with special emphasis on processed meat and convenience food.

Frutarom said the business complements the company’s German activities, Gewurzmuller and Nesse, which were acquired in 2007 and 2006, respectively. The company plans to shut down a production site in Holdorf, Germany, that it is acquiring as part of the purchase, with production being transferred to sites in North and South Germany to achieve operational savings.

"This acquisition is an additional step in the implementation of Frutarom’s rapid growth strategy and further establishes Frutarom’s position as one of the 10 largest global leaders in the field of flavors and as a leading global producer of savory flavors solutions," said Ori Yehudai, president and chief executive officer of the Frutarom Group.

Mr. Yehudai said the acquired activity holds a significant market share among industrial meat customers in Germany, and will strengthen Frutarom’s positioning and its market share among customers in Germany.

"Frutarom will act to extract the greatest advantage from the operational synergy between its activities and the acquired activity in Germany and elsewhere to achieve optimal operational efficiency and maximal savings, which will be achieved in a short period of time due to the closing of the production site in Holdorf and transferring the activity to our existing sites in Germany," he said. "Above and beyond the extensive synergy existing in the German market, there is synergy between the acquired activity and Frutarom’s activity in additional countries, particularly in Scandinavia and U.K."

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