The Israel-based flavours, botanicals and speciality ingredients player is building a large flavour manufacturing facility in the Shanghai industrial region as part of its internal growth strategy, Ori Yehudi, CEO of Frutarom confirmed.
The facility will continue to develop the sweet flavours side of the business, he said, but will also be focused on savoury solutions; a part of the business not present in China at the moment.
“There is a very big, growing demand for savoury flavours and solutions in Asia; for processed meats and fish, noodles, snacks and the ready-to-eat segments,” Yehudi told FoodNavigator-Asia.
With the new facility, “it will be much easier to leverage our strengths in the savoury sector across China and Southeast Asia,” he added.
The new facility will have an integrated R&D innovation centre that will work closely with customers in the region, he said, and this will ensure flavour applications are tailored to market requirements in terms of taste.
Production will be a combination of reformulated ingredients used in other markets such as the US and new ingredients specially developed for the China and Southeast Asia, he explained.
Alternative Asian growth strategy
Frutarom has been pursuing a heavy global growth strategy in the past few years driven by acquisitions, with three buy-outs in 2012 alone.
But Yehudi said that for Asia, the company is instead focused on internal growth and acquisitions will be a secondary growth driver.
The company is looking at possible acquisitions in China, with focus on natural extracts for sweet and savoury flavours in the health segment, he added, but nothing has been confirmed.
“We are focused on these emerging markets,” Yehudi said, as the growth in these regions is much higher than the developed markets of Europe and the US for example.
Frutarom already has a manufacturing plant in the Eastern city of Kunshan, but the new facility will be much larger, he noted.
The land for the facility was acquired at the end of 2011, he said, and the authorities are now developing the site for building to commence.
We have started the drawing up plans and the plant should be completed within two years, he concluded.