Israeli flavors and natural specialty fine ingredients company Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF) has acquired 60% of the Vietnamese company Western Flavors Fragrances Production (WFF) for $1.3 million.
The purchase agreement includes an option for purchasing the balance of WFF shares within four years from completion of the transaction at a price based on the future business performance of WFF. The transaction will be completed in the ucoming weeks and will be financed through independent means. WFF has annual sales of $1.5 million.
This is Frutarom's third acquisition in 2017 and its second this week after it announced on Tuesday that it is buying French company Rene Laurent for $23.5 million.
WFF was founded in 2003, has 44 employees and develops, produces and markets flavors, mostly sweet flavors with emphasis on dairy, beverages, confectionery and baked goods. The company has a broad portfolio of products and around 300 customers from among the leaders in their fields in Vietnam. WFF has a plant and laboratory in southern Vietnam in Ho Chi Minh City and a sales and marketing office in Hanoi.
Frutarom intends to build a modern new flavors plant in Ho Chi Minh City which will enable it to significantly expand its activity in the Vietnamese market and in the growing countries of the region.
The Director of WFF, Mrs. Phuong Nguyen, the main shareholder in WFF and with 20 years of experience in the flavors and food industry, will continue managing the company’s activity.
Vietnam, with a population of 90 million, is one of the Southeast Asia’s growing economies with a projected growth rate for next year of over 6% based mainly on continued rapid growth in the country’s foreign trade.
WFF’s activity is synergetic with Frutarom’s activity in Vietnam and Southeast Asia in the field of sweet flavors which has grown in recent years at a faster rate than the market. The acquisition of WFF is part of the fulfillment of Frutarom’s strategy to significantly expand its activity in Asia. In this framework Frutarom acquired in 2015 the Indian flavors company Sonarome and the Chinese taste solutions company Inventive, and in 2016 inaugurated a new modern flavors plant, including an advanced R&D laboratory, in Shanghai, China.
Frutarom president and CEO Ori Yehudai said, "The acquisition of the Vietnamese flavors company WFF is the continuation of Frutarom’s implementation of its rapid and profitable growth strategy and fulfillment of its vision ‘to be the preferred partner for tasty and healthy success.’ The acquisition will contribute to strengthening our position in Vietnam with the attaining of a significant relative advantage of having a local R&D, sales production presence in one of Southeast Asia’s important growing markets."
Published by Globes [online], Israel business news - www.globes-online.com - on April 6, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017