The US firm said its re-organisation is part of the integration of the International Spcialty Products (ISP) alginates business, which it acquired in August last year.
Under the proposed plan, expected to be complete by the end of this year, FMC will consolidate alginate extract production at its plant in Haugesund, Norway. Finished product blending would be conducted primarily at the facility in Girvan, Scotland.
Alginate production facilities
According to hydrocolloid market expert Dennis Seisun from IMR International, this would make FMC’s Haugesund facility the largest alginate production facility in the western world.
“Cargill and Danisco each operate a relatively small alginate production facility in France. All other production of alginates is either in China, Japan or Chile. There is no PGA (propylene glycol alginate) production in the western world. It is only produced in China, Japan and Chile,” he said.
FMC’s plan would shut down its blending operations in Slippen, Norway, and would transfer extract production from Girvan to Haugesund.
The re-organisation is still pending a consultation period with employees and unions in Norway and Scotland. FMC told FoodNavigator.com that the realignment would result in a reduction of around 180 – 190 jobs in its alginate operations in Scotland and Norway.
Supply unchanged
The company denied that the move is linked to the global economic downturn, stating that “this type of action is customary in any acquisition or merger”.
The firm did not specify if alginate production levels would be affected, but said its consolidated production capacity “will remain capable of supplying the current and future needs” of customers in the food, pharmaceutical, healthcare and industrial markets. Supply and delivery times would not be impacted, it said.
“We do not anticipate any change in our ability to supply our customers with ingredients. Our standard lead times for customer orders take into account plant sites and shipping timelines and will remain the same,” FMC marketing communications manager Olga Drebotij told FoodNavigator.com.
Improved efficiencies
Alginates are hydrocolloids derived from seaweed. They are used in a range of food and pharmaceutical applications for the thickening, stabilizing and gelling properties.
FMC said its alginate manufacturing reshuffle would not affect the current operation or ownership of the Iceland or Tasmania seaweed sourcing operations acquired from ISP.
The ISP deal, first announced in May last year, included ISP's alginates and food blends business, apart from its Brazil-based Germinal blending business. It was intended to strengthen the firm’s global cost competitiveness.
FMC said the current realignment would improve efficiences and further strengthen its business for the long term through investment in specific site capabilities, and through expertise in extract production and finished product blending.
According to Dennis Seisun, there is currently tightness in alginate supply mainly related to global availability of brown seaweed used in alginate production.