Frutarom makes near-record ninth 2015 acquisition

The acquisition of any new company by a large Israeli firm is major news. But for Frutarom, its acquisition of Scandia Citrus, LLC of Florida last week — its ninth this year — is a unique accomplishment: It approaches the record number of companies acquired by a corporation in a single year — the Massachusetts-based Alere Global bought 10 companies in 2007.

Now the seventh-largest flavoring and ingredient company in the world, Frutarom’s latest acquisition makes it one of the world’s leaders in the citrus business: In 2014, the company acquired CitraSource, which also specializes in citrus and whose production facilities and development labs are also situated in Florida, not far from those of Scandia.

As Florida “natives,” both Scandia and CitraSource are very familiar with the citrus market — Florida is by far the biggest supplier of citrus products in the US. Frutarom, the company said, plans on leveraging the acquisitions’ “extensive knowledge in citrus, R&D and marketing capabilities, and its ingenuity, which includes a unique technology for the molecular distillation of citrus oils,” in order to develop new and better citrus flavorings for use in food, beverages, and other products.

With this year’s acquisitions, including one in Australia, Frutarom has a presence on every continent (except for Antarctica — so far), and is now the seventh-largest flavoring and ingredients company in the world. Established in 1933, Frutarom offers a total of some 31,000 products, which are sold to more than 15,500 customers in 145 countries around the world — including Algeria, Kuwait, the United Arab Emirates, via its Flachsmann A/S subsidiary.

Frutarom, now part of an international holding group, ICC Industries, is still headquartered in Haifa, and made a profit of $63.6 million on revenues of $684 million in 2013.

Lest one think that producing flavors and fragrances is an “old tech” industry, Frutarom operates no fewer than 41 state-of-the-art R&D firms around the world, where top scientists in the chemical and flavorings industry come up with new ways to impart the tastes that — the marketers have determined — are craved by their customers.

Along with the R&D labs, Frutarom operates over 80 sales and marketing offices throughout the world, along with 34 production facilities in Europe, North America, Israel and Asia. Overall, the company has approximately 3,300 employees.

Frutarom’s biggest acquisition this year, and an extremely strategic one, took place in June, when the company announced it had acquired Australia’s Taura Natural Ingredients for $70 million in cash.

Taura is one of the biggest companies in the world in concentrated and texturized fruit ingredients and flavorings, with a broad customer base that includes leading global and national food and beverage makers in the US, the Asia-Pacific region and Europe. Taura’s sales over the 12 months ending March 31, 2015, reached approximately $40 million.

In May, Frutarom made a smaller — but no less-strategic — acquisition when it acquired 60% of the share capital of the Indian flavors and fragrances company Sonarome. Besides India, Sonarome has extensive activity in about 20 African markets, particularly in Nigeria, South Africa, Ethiopia, Kenya and Mozambique — areas into which Frutarom seeks to expand.

Commenting on the Scandia deal, Ori Yehudai, the president and CEO of the Frutarom Group, said that the acquisition was somewhat of a “homecoming” for the company.

“Frutarom got its start in the cultivation and extracting of citrus in Israel. Today, 82 years after Frutarom was founded, citrus still makes up a large and important part of our activity and constitutes one of our competitive advantages. The improved back integration brought about with the acquisition of CitraSource last year will now be further reinforced with the acquisition of Scandia, and will help us continue establishing our position as a global leader in the citrus market while enhancing our offerings of innovative products and the service we provide our customers.

“The acquisition of Scandia joins the eight acquisitions completed since the beginning of the year and supports the continuing positioning of Frutarom as a leading player in the global market for flavors and specialty fine ingredients,” he added.