German anti-trust authority clears Wild expansion
acquisition should enable the firm to achieve a coordinated sales
base in Europe.
Wild, which claims to be the world's largest private producer of natural flavour ingredients, signed the agreement with Deutsch Schweizerische Früchteverarbeitungs (DSF) to acquire its fruit preparation facility in Nauen last month.
But with the approval of the German anti-trust authority now settled, the sales contract can finally be completed.
The acquisition of the plant, which produces fruit preparations for the dairy sector, is designed to strengthen the German company's position in the lucrative European flavours market. In addition the Nauen facility, which specialises in fruit preparations for the dairy industry, is ideally situated.
"This facility will give us additional capacity in the production of natural flavour ingredients," managing director Hans-Peter Voss told FoodNavigator.com recently.
It should also strengthen the company's position in a difficult, though lucrative, industry. Market analyst IAL Consultants estimated recently that the global market for flavours and fragrances hit $11.6 billion (€8.6bn) in 2003, while according to Frost & Sullivan, the €819.9 million European and US fruit and vegetable extracts and powders market is on course to grow 4.5 per cent annually, reaching €1.07 billion by 2009.
Wild also went for the deal because it believes that the acquisition fits perfectly into the infrastructure between the already existing fruit preparation facilities in Rouen (France), Heidelberg (Germany), and Mragowo (Poland).
"This closes the logistics gap," said Voss. The strategic position of the new plant should also help ensure that transport costs are kept to a minimum. Energy and transport costs have been rocketing, putting incredible pressure on ingredient suppliers to pass on costs. When DSF was acquired by Austrian company Agrana in July 2005, the German Antitrust Authority put down postponing conditions for approval.
The Antitrust Authority, which is looking to strengthen competition in the fruit preparations market in Germany, required that Agrana reduce its market share by selling part of DSF. According to the contracting parties, this could be fulfilled by Wild's acquisition of the Nauen facility.
