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Frutarom (Haifa, Israel) credits its accelerated expansion strategy and the "basic human need" positioning of its offerings for its 28.5% gain in 2008 sales, totaling $473.3 million. Gross profit grew by 34.8% to $176.3 million, while operating profit jumped 64% to $56.6 million. In addition, net profit rose 53.9% to $37.2 million.
Frutarom notes that it used 2008 to fully integrate the seven acquisitions it made in 2007, meanwhile adjusting pricing to reflect raw material and production cost increases. Having completed integration, the company has resumed acquisitions, including Oxford and FSI. The company has also been boosted by organic growth in flavor sales, though Frutarom noted "considerable" inventory reducing moves by global customers, particularly in the last quarter of 2008.
"We are convinced, that we will be able to achieve our goals and double Frutarom's turnover, so that it will reach US$ 1 billion by 2012," noted president and CEO Ori Yehudai. "We have already made two strategic acquisitions which enhance the further expansion of our global presence, our customer base throughout the world and the product range we offer them. Frutarom's solid capital structure and the strong support we receive from leading financial institutes will enable us to utilize acquisition opportunities created due to the global economic crisis and to continue implementing our acquisition strategy. We consider the challenging and complex period which global economics undergoes as an opportunity for further strengthening".
Yehudai added, "We consider the challenging and complex period which global economics undergoes as an opportunity for further strengthening ... Frutarom's core businesses, mostly intended for the food industry, a basic human need, which place it in a stable and defensive field and its ability to generate cash from current activities, will enable it to successfully glide trough the global economic crisis and exploit opportunities which have emerged and continue to emerge as a result of this crisis ... Such needs do not vanish in times of economic crisis, and indeed, analyzing previous economic crises tells us that the food industry and industries related usually demonstrate relatively low sensitivity to the effects of slowdown and instability in the macro-economic environment, especially in comparison to many other industries."