ICL expands phosphate capacity across Atlantic

By Anthony Fletcher

- Last updated on GMT

Related tags Acid Phosphate

Israel Chemicals (ICL's) acquisition of US speciality phosphates
firm Astaris will give the firm a foothold in the lucrative North
American ingredients market.

The Israeli firm's intention is to integrate the acquired assets into the framework of ICL Performance Products, as part of its expansion of the range of higher value-addeddownstream products.

Phosphoric acid is used to acidify foods and beverages such as various colas, and provides a tangy taste. As an agro-industrial chemical, it is available cheaply and in large quantities.

The low cost and bulk availability makes it a popular alternative to more expensive natural seasonings that give comparable flavours, such as ginger for tanginess, or citric acid for sourness, obtainable from lemons and limes.

Underlying growth rates have been impacted by rising raw materials costs, and producers have begun to rationalise capacity in West Europe and North America, according to a report by British Sulphur Consultants. Nonetheless, the US market for food additives topped $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 according to Business Communications Company. Acidulants, of which phosphoric acid is one, find their largest market in beverages, mostly in soft drinks.

According to BCC, the US market for acidulants was about $410 million in 2001, and should grow at an AAGR of 3.3 per cent to $483 million in 2006.

ICL therefore believes that the addition of Astaris' business will therefore be highly complimentary to the group's speciality phosphate activities in Israel, Europe, Asia and South America. The firm hopes to take advantage of the benefits of economies of scale and complementary technological know-how that the acquisition will provide.

Astaris is a North American leader in food phosphoric acid and phosphate salts. Formerly a joint venture between FMC Corporation and Solutia, it recorded revenues of $350 million in 2004 with 570 employees and manufacturing facilities in the US and Brazil.

Astaris recently completed a new R&D facility in the St. Louis suburb of Webster Groves. The facility was designed to establish an independent R&D environment for Astaris, which has shared research and product development space with one of its parent companies, Solutia.

The new 10,000 sq. ft. building provides both laboratory facilities and office space to bolster Astaris' product development and optimisation capabilities across its entire range of food and technical grade phosphate salts and acids.

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