"We view this challenging and complex period in the global economy as an opportunity to further establish Frutarom’s position,” said CEO Ori Yehudai.
Part of the reason that he expects the company to “glide through the global economic crisis and exploit the opportunities which have emerged and continue to emerge as a result” is because its core business is in food – a basic human need.
In addition, it has a strong capital structure and is generating cash from its current activities.
Frutarom has been pursuing a rapid growth strategy for the last few years, and in 2007 made no less than seven acquisitions: Belmay, Jupiter, Raychan Food Industries, Abaco, Adumim, Gewurzmuller Group, and RAD Natural Technologies.
Although Yehudai could not be reached today for comment about the precise opportunities he is sniffing out as a result of the economic situation, he told FoodNavigator.com in August that the firm was casting about for more acquisitions before the end of 2008.
“We have an interesting pipeline of future deals,” he said – and a new slate of deals would help propel Frutarom towards its goal of being a $1bn firm by 2012.
It spent the first half of this year consolidating and integrating the 2007 seven into its operations.
Another strong quarter
Yehudai’s remarks about the new opportunities springing from were made as part of a communiqué about the firm’s Q3 results (which include the results of the newly absorbed entities).
Sales for the quarter grew by 36.9 per cent to US$120m and operating profit was reported at $15m, up 79.6 per cent.
The company has also enjoyed an improvement in margins to 37.7 per cent, compared to 36 per cent for Q3 2007.
Beside the direct contribution to sales from the new acquisitions, Frutarom is also able to exact operational synergies every time it brings a new business into the fold – and that results in savings.
In addition, internal sales growth was reported for both the flavour and fine ingredients divisions; and exchange rates have also swung in Frutarom’s favour, as European currencies and the Israeli shekel strengthened against the US dollar, its reporting currency.