HERZLIYA, ISRAEL — Frutarom Industries Ltd. gained exclusive worldwide marketing rights for algae products from Algalo Industries Ltd. by signing an agreement to invest in Algalo, Frutarom said Jan. 4. Frutarom will invest NIS 10 million ($2.5 million) in exchange for the allocation of 50% of Algalo shares to build a biotechnology facility that specializes in the cultivation, harvesting and processing of algae. Algalo, a biotech start-up enterprise based in Kibbutz Ein HaMifratz, Israel, has developed a method for the cultivation, harvesting and processing of a variety of algae that yield active ingredients for use in the food, dietary and clinical nutrition supplements, and cosmetics industries.
“The size of the algae-based ingredient market is estimated to be hundreds of millions of dollars and has enjoyed double-digit growth over recent years,” said Ori Yehudai, president and chief executive officer of the Frutarom Group. ”We foresee the rapid growth in this market continuing in coming years in light of consumer trends toward healthier and more natural products that drive the food, nutritional supplements and cosmetics companies to be innovative in developing natural ingredients and efficient in their production processes and cost structure.”
Herzliya-based Frutarom operates in the global flavors and natural fine ingredients markets.
“The investment in Algalo is part of a broad strategic move by Frutarom to reinforce its position and standing as a leading and innovative global supplier of natural specialty products and functional food ingredients in the fields of taste and health, which already now make up over 75% of Frutarom’s activity,” Mr. Yehudai said. “The technology developed by Algalo for cultivating, harvesting and processing algae expands Frutarom’s internal research and development capabilities for producing active ingredients from algae, a field in which we are already active, and provides an innovative platform and an additional growth engine for expanding Frutarom's diverse product portfolio in the growing field of natural specialty ingredients. We will work toward leveraging the cross-selling opportunities arising from this investment by expanding Frutarom’s product portfolio and technological abilities and by presenting Algalo’s innovative products to our thousands of customers worldwide.”