Givaudan off-loads St Louis ingredient facility to PCI

By Stephen Daniells

- Last updated on GMT

Related tags Givaudan Investment

Fragrance and flavors player Givaudan has announced the sale of its
St Louis based food ingredient business and manufacturing facility,
as the company continues product streamlining.

In addition to streamlining, the company stated that it was inline with its strategy to focus on high value adding flavors, with the vanilla extract and flavor business not included in the sale, and remain part of the Givaudan product portfolio. Peter Wullschleger, head investor and media relations for Givaudan Suisse SA, told that further moves in this area concerning facilities in the US or globally can be expected in the future. Wullschleger also confirmed that the vanilla extract and flavor business would remain within the US and be transferred to Givaudan sites in the country. St. Louis-based Performance Chemicals & Ingredients Company (PCI) has bought the business for an undisclosed amount. In 2007, the divested business had sales of CHF 40 million ($36.7 million). The facility produces flavor bases and fruit preparations used by dairy companies in the production of ice cream. Charles Nicolais, president of Performance Chemicals & Ingredients Co, told​ that the dairy flavor systems business has been renamed SensoryFlavors, Inc. "PCI Company not only bought the facility but the dairy flavor systems business of Givaudan,"​ said Nicolais. "Its business model is consistent with our businesses, namely working closely with customers in a collaborative manner to develop specialty ingredient systems. We believe this business will thrive in a small, agile company rather than the large corporation, as did Givaudan which is the reason they sold the business to us." ​ PCI was formed in 2006 with the aim of acquiring and managing specialty chemical and food ingredient businesses, according to the website of its parent company Diehl Talking to this website, Nicolais said the acquisition was in-line with these aims. "The dairy flavor systems business was a non-strategic business unit of Givaudan's and a reason they sold it as they are focusing on their core businesses. For us, it fits our strategy of investing in high customer touch and specialty food ingredient delivery systems,"​ he said. "PCI Company will continue to invest in these types of businesses through acquisition and internal investments for organic growth." ​ Outlining the company's plans for SensoryFlavors, Nicolais said that PCI intends to invest in the Bridgeton site and will be adding positions in order to create an independent and efficient business. Givaudan performance ​ Last August, Givaudan reported that sales in the flavors division increased 2.2 per cent to CHF1.1 billion on a pro forma basis, a rise of 2.4 per cent in local currencies. The company said that this performance was impacted by the discontinuation of commodity ingredients, which hit sales by CHF27m. On a regional basis flavors sales grew in strong double digit figures, whereas sales growth led the way in Europe where double digit growth figures was reported on the back of strong performances in Eastern Europe and the Middle East. Looking ahead to the second quarter of 2007, the company said that it was confident that it would stay ahead of underlying market growth figures and that profitability would improve. It also said that it would be applying its profitability improvement strategy to its newly combined business portfolio, which should see savings of CHF200m and ultimately put it in a position to exceed underlying market growth at pre-acquisition rates by early 2010. This article was updated on February 18th from the original, published February 15, 2008.

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