Frutarom acquires South African flavour firm Unique Flavors

10-Feb-2017 - Last updated on 10-Feb-2017 at 14:54 GMT

Related tags Africa

Israeli flavour firm Frutarom has acquired South African supplier Unique Flavors as it edges towards its recently-set target of hitting sales of $2 billion (€1.9bn) by 2020.

The transaction is worth 90 million South African Rand (€6.3m).

Unique develops, manufactures and markets flavours – with an emphasis on savoury flavours – at its facility in Pretoria. With reported sales volumes of ZAR 131 million (€9.2m) for the year ending 31 January 2017, it has a wide customer base in South Africa and other Sub-Saharan emerging markets such as Ghana, Malawi, Zimbabwe and Mozambique.

“Its activity is synergetic to Frutarom’s flavours activity in Africa which has grown in recent years at a substantial pace surpassing the rate of market growth,” said a statement by Frutarom.

African consumer, drink, millennial Copyright m-imagephotography — © iStock

This is Frutarom’s second acquisition in Africa after it bought JannDeRee in 2013, reflecting the company’s ambitions in the continent where it is expanding activity through investments in manufacturing infrastructure and local research and development (R&D) and marketing capacities.

Last year it opened a new production plant and R&D centre in Johannesburg.

President and CEO of Frutarom Group Ori Yehudai said: “We intend to combine Unique’s R&D and sales and marketing platform in Africa with Frutarom’s global R&D and sales and marketing platform in order to realise and leverage the abundant cross-selling opportunities between their activities.

“We also intend to capitalise on the synergies and savings made available by combining Unique’s activity with Frutarom’s existing activity in South Africa.”

Frutarom has built up an impressive momentum of successive strategic acquisitions in recent years, and has no plans to stop.

"We are working on seeking out and executing additional acquisitions of companies and activities in our fields of activity, with special focus on high-growth markets in Asia, Central and South America, Central and Eastern Europe and in Africa,” Yehudai said.

Its share of sales from emerging markets grew from 27% in 2010 to over 40% in 2016. It recently set itself the target of hitting US$2 billion in sales with an EBITDA margin of over 22% in core activities by 2020.