International Flavors & Fragrances Inc. plans to close its fragrances ingredients manufacturing facility in Augusta, Georgia by July 2014 and will consolidate production into existing IFF ingredients facilities.
Following its most recent full-year 2012 results posted in February, which showed that fragrance ingredients declined 10% in local currency sales in 2012 versus 2011, IFF said on Friday that closing the Augusta plant will improve efficiencies within the ingredients manufacturing network, thereby supporting the company's objective to ensure operations are cost-efficient and competitive.
"Providing innovative and cost-effective ingredients for use in our fragrance compounds business is our number one priority and is critical to our ability to create winning solutions for our customers," said Nicolas Mirzayantz, fragrances group president. "Our fragrance ingredients business supplies our fine fragrance and beauty care and functional fragrances categories with differentiated and captive ingredients that provide us with a strategic and competitive advantage, and enable our perfumers to create winning consumer fragrances for our customers' brands."
Mirzayantz continued: "With a changing competitive environment, we have decided to streamline those parts of our business that support lower value-added, commodity-like ingredients and remain focused on those areas that are more value-enhancing. Based on our ongoing business review, this is one of several actions we are taking to improve the competitiveness of our fragrance ingredients business, and to position our overall fragrances business for long-term profitable growth."
Rob Edelman, senior vice president fragrance ingredients added, "While market forces clearly dictate the optimization of ingredients' production, we do not make decisions such as this lightly. We value our employees and will do everything possible to treat them with fairness and sensitivity. Moving production to existing ingredients plants creates synergies for IFF that will improve customer service levels while we continue to invest for the future."