As a result of its 51% stake, the India-headquartered chemicals major will become the third-biggest vanillin producer in the world. It will also allow the company to vertically integrate its vanillin manufacturing, which is currently spearheaded by a European subsidiary.
CFS Europe’s Ravenna plant in Italy produces catechol, the basic material used to make vanillin and ethyl-vanillin. The acquisition of Wanglong, with its 3,500-square-metre factory in Zhejiang province, will now allow CFS to improve its traceability from the raw ingredient to the finished product, the company said.
“Each batch is carefully tested by our food flavorists so that we deliver our customer requirements with consistency.
“To support future growth, CFS Wanglong will introduce relevant processes and equipment besides existing installed adequate capacity for operations. Our flavours and fragrances segment will contribute to a large portion of our business in the near future,” the company added.
CFS’s Vanesse and Evanil brands have a customer base both in the food and fragrance industries, with growing product ranges.
Founded in 2015, Wanglong is a relative newcomer in the market, not least compared to CFS, which was established in 1931. Aside from vanillin, it manufactures antioxidants and performance chemicals.
In 2016, the company acquired a 65% stake in Mexico’s Dresen Quimica, along with its group companies, for US$7.8m in cash.
In the last financial year, it reported a net loss of INR4.3bn (US$66.5m) on total income of INR549bn.