Frutarom has acquired Hong Kong-based companies Inventive Technology and Prowin International as it looks to expand its activity in the emerging markets of China and Southeast Asia through internal growth and by means of acquisition.
Frutarom has acquired Hong Kong-based companies Inventive Technology and Prowin International ("Inventive") for $17 million.Inventive was founded in 1998 and engages in the development, manufacture and marketing of flavours and flavour inclusions through the application of technologies for combining flavours with fruit components, chocolate, grains and nuts in many food products, particularly dairy products, ice creams, pastries and beverages. In the 12 months ending October 2015, sales for Inventive reached $13.7 million. Inventive has manufacturing, research and development, and marketing facilities at Zhàoqìng in southern China where it has excess production capacity, as well as an R&D and sales centre in Shanghai and sales and marketing offices in Hong Kong. The company has a broad customer base which includes global food and beverage makers along with leading Chinese food and beverage manufacturers, and its products are sold in China, Southeast Asia, the Middle East and South America. The company's management is said to have excellent relationships with these leading customers and Frutarom says it will make use of these ties to capitalise on the cross-selling opportunities."The acquisition of Inventive is the continuation of Frutarom Group's implementation of its rapid growth strategy and the realization of its vision 'to be the preferred partner for tasty and healthy success',” said Ori Yehudai, President and CEO of Frutarom. “We have made it a main goal to expand our activity in the emerging markets of China and Southeast Asia with their high rates of growth, both through internal growth and by means of acquisition. The acquisition of Inventive, one of China's leading local companies in flavors and flavor inclusions, is another important step towards attaining this goal. Growth rates for processed food consumption in China continue to be high and stem from the urbanization of Chinese society, the entry of women into the workforce, and changes in the lifestyle and spending habits of the Chinese consumer. Processed food consumption in China is projected to surpass that of the United States in 2015 while the average Chinese consumer consumes just around one quarter of the processed food consumed by the average American consumer, so the potential for continued growth is quite strong.”"In combination with Inventive's activities, Frutarom will continue developing and deepening its presence in the important markets of China and Southeast Asia and will utilize and integrate Inventive's R&D and sales and marketing platform with Frutarom's own global R&D and sales and marketing infrastructure in order to leverage and realize the many cross-selling opportunities generated by this acquisition," said Mr. Yehudai."Construction was recently completed on our modern advanced Chinese plant, with its state-of-the-art laboratories for development and applications, which will provide us for the first time the ability to develop and produce savory flavoring solutions locally in China, and we are convinced that our new plant will contribute towards taking a leap forward in our activities in China and Southeast Asia which constitute target markets for growth and for leveraging our competitive advantages," continued Yehudai. "We intend to work towards attaining maximum optimization in the operations of the two plants – Inventive's and Frutarom's – and provide Inventive customers the best of Frutarom's capabilities and its wide-ranging product portfolio.”"By virtue of the acquisition, Frutarom's workforce will enjoy a substantial boost and reinforcement by experienced and efficient managers and employees at every level," added Yehudai. "The outstanding, strong, and seasoned management at Inventive will lend its rich experience to Frutarom, become incorporated into Frutarom management in Southeast Asia markets, and together lead the way ahead to accelerated growth in these important markets.”"Thanks to Frutarom's proven experience carrying out acquisitions and capitalizing on the potential synergies inherent in merging the acquired activity with those of Frutarom, we are certain that this acquisition too will contribute to the continuation of Frutarom's rapid and profitable growth and generate high value for our customers, employees and investors," concluded Yehudai. "The acquisition of Inventive is the twelfth acquisition we have made this year, and we are continuing to seek out and perform further strategic acquisitions of companies and operations in our fields of activity while strengthening our position as a leading global player in the field of natural solutions for taste and health."