Job cuts in colours

- Last updated on GMT

Related tags: Flavor

Hot on the heels of disappointing third quarter results, notably in
the colours division hit by weaker sales in the US, Sensient
Technologies has announced a round of cost cutting measures which
will include job losses.

In October the US colours and flavours group reported that operating income for the colours division had fallen a massive 17.1 per cent, plunging from $21,251 for the third quarter of 2002 to $17,608 for the same period in 2003.

In a bid to recuperate some of the loss, the company will be cutting costs, by reducing 'headcount and improving the efficiencies of its operations,'​ Sensient said in a statement this week.

In addition, the company will 'eliminate the expense associated with subsidising certain postretirement programmes.'

Exact details of the number of 'heads' involved were not disclosed but the company said it expects to realise annual pre-tax savings of approximately $10 million through the moves.

"This plan is in response to continued softness within the company's food and beverage markets, primarily in North America,'​ said Kenneth Manning, chairman and CEO of Sensient.

Despite gains in Europe, the company continues to feel the impact of a weaker home market.

According to a recent study from Business Communications, 'The Food Additives Business​, the total US market for food additives, the category into which colours fall, reached nearly $5 billion in 2001 and is expected to rise at an AAGR (average annual growth rate) of 3.1 per cent to $5.8 billion in 2006.

Reflecting the market movement of flavours, particular growth for natural food colourants is growing faster than in previous years, driven by public demand for 'natural' and less 'chemical' products. This $320 million market should grow to $371 million in 2006, predicts the report.

Certifiable colour additives - of which there are nine in total - are manmade, with each batch being tested by manufacturer and the US Food and Drug Administration.

Colour additives exempt from certification include pigments derived from natural sources such as vegetables, minerals or animals, and man-made counterparts of natural derivatives.

Related topics: Market Trends, Flavours and colours

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