International Flavours and Fragrances (IFF) is to separate its business into two different units in a bid to better reflect its flavour and fragrance operations.
The new business unit structure, which is due to be effective 1 January 2007, is designed to sharpen the company's focus and accountability across the organisation and accelerate its growth.
The company's board of directors has elected Hernan Vaisman and Nicolas Mirzayantz as group presidents for the company's flavours and fragrances units respectively.
They will each be responsible for strategy, commercial and creative execution, people development and the profit and loss of their respective global business units, said Robert Amen, IFF's chairman and chief executive officer.
"This new leadership structure is designed to enhance IFF's strong foundation in our principal businesses and unleash our potential," said Amen.
"Both Hernan and Nicolas have a deep understanding of the unique needs of IFF's customer segments. Their international experience and leadership skills will promote a culture of achievement and accountability. This structure allows IFF to improve focus on our businesses to best serve our stakeholders - our customers, shareholders and employees," he added.
The two new business units are expected to maintain a regional structure for sales, marketing and creative development.
The company also said it will continue to leverage the operating and creative efficiencies achieved through a centralised support structure. Global marketing, supply chain management, research and development, human resources, finance, and legal will continue to report to the CEO.
Yesterday's announcement comes after a difficult year for the leading US-based flavours firm.
Sales for its full year 2005 declined 2 percent to $1,993m compared to the previous year, with North American fragrance and flavour sales declining 1 per cent and 7 per cent respectively. European sales declined 8 percent in the year.
In January this year, IFF announced plans to cut costs and improve profitability, which involved slashing 300 employees - or 6 percent of the company's total workforce - in an effort to generate $16m - $18m in annual savings.
At the time, IFF had said it expected 2006 local currency sales to increase in the low single digits in comparison to 2005.
And although in April IFF announced a 2 per cent slide in first quarter 2006 sales, the company's second quarter revealed a 3 per cent increase in sales to reach a total of $531m. Fragrance and flavour sales in the quarter increased 3 per cent and 2 per cent respectively.