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Frutarom Q2 Profit Up 30% Amid Growth in Flavors, Natural Products

Posted: August 21, 2013

Frutarom's second-quarter profit rose 30% thanks in part to the company's recent acquisitions as well as accelerated growth in flavors and greater demand for its high-margin natural products.

For the second-quarter, the company's profit rose to $17.6 million compared with $13.5 million a year earlier. Fruatrom also said that accelerated organic growth in flavors continued in the American market over the first half of 2013, a trend which is expected to continue throughout the end of this year and into next year.

Frutarom's second-quarter sales rose to $168.6 million, a 2.3% increase compared with $164.8 million in  the year-ago second quarter. In the flavors segment, Frutarom’s most profitable activity, sales for the quarter reached $125.1 million, representing 74% of Frutarom’s sales.

In the first half of 2013, Frutarom sales grew to $320.8 million, and sales in the flavors segment grew, reaching $235.7 million.

“It is our intention to continue to invest in expanding our activities and our market share in emerging markets, where we are successful in growing at a rate higher than market growth," said Ori Yehudai, Fruatrom's president and CEO.

"Organic growth combined with the acquisitions have strengthened our presence in strategic markets, particularly in North America, Asia, Latin America and Africa, which today are considered the fastest growing food markets in the world. We will continue to invest great resources in accelerating growth in these markets, including by identifying and performing acquisitions, in order to utilize their great potential," he added.  

Yehudai also mentioned that Frutarom is expanding its natural product offering with a special emphasis on natural foods and health foods, which he said have an increasing demand and higher margins.

“We continue to implement our projects for integration of production sites, transfer of activities to lower cost countries and improving supply chain and logistics," Yehudai said. "These projects will bring about significant savings in a yearly scope of $10 million, which will begin to come to fruition starting in the second half of 2013 and mainly in 2014."