Algaia acquires Cargill's alginate business

By Niamh Michail contact

- Last updated on GMT

'For the time being, only alginate is manufactured at this plant but we may want to enlarge its scope...' © iStock/Torsakarin
'For the time being, only alginate is manufactured at this plant but we may want to enlarge its scope...' © iStock/Torsakarin

Related tags: Natural gum, Carrageenan, Cargill

French firm Algaia has strengthened its seaweed extract capacity with the acquisition of Cargill’s alginate business.

Algaia will purchase Cargill's alginates manufacturing plant located in Lannilis, northern France. Alginates are used as a natural and clean label thickening agent for ice creams, drinks and jellies.

The deal transfers Cargill’s entire alginate processing capability to the Paris-headquartered Algaia, previously known as Eviagenics.

President and CEO of Algaia Fabrice Bohin said: “The acquisition of Cargill’s alginate business nicely fits into our strategy. Our commercial, technical, engineering and management teams benefit from decades of experience in the field of marine-based hydrocolloids or specialty extracts.

“We will be able to support and grow the alginate business, and we will continue to expand our structure with additional industry talents.”

Bohin, who has previously held positions at Cargill’s hydrocolloid division and Rhodia Food, told FoodNavigator the acquisition would allow the company the possibility of extending its product portfolio in the future.

For the time being, only alginate is manufactured at this plant but we may want to enlarge its scope upon completion of the acquisition,” ​he said, adding that the company has some new ingredients in the pipeline although he could not disclose any details.

New investor confirmed

Update: On 26 September Algaia confirmed that Israeli health and nutrition company Maabarot Products was joining as the new strategic investor with the Cargill Alginate business acquisition.

Chairman of the Tel Aviv Stock Exchange-listed company, Eyal Shalmon, said Maabarot intended to "invest significantly"​ to improve and expand prodction at the Lannilis factory.

No jobs lost

Earlier this year employees at the Lannilis plant staged demonstrations to protect about reported job losses following news that Cargill would close the plant should it not find any buyers.

Bohin confirmed that there would be no job losses following the acquisition.

Cargill had been operating at the Lannilis site, which currently employs 66 people, since 2006 and invested $15 million (€13.4m) expanding capacity, upgrading employee safety and improving waste water treatment at the plant.

In a statement described the agreement as a positive development for the factory's employees, customers and suppliers. "[We]​ concluded in June 2016, after a thorough analysis, that we are not the best-suited parent to manage the alginates facility in Lannilis.   Cargill started to  search for alternative solution allowing for the continuation of the activity in Lannilis."

It added that hydrocolloids and seaweed ingredients would remain a core part of its Cargill Texturizing business and would use alginates to create its functional systems portfolio.

Switch to seaweed

Algaia has been focusing on creating value added seaweed-derived ingredients for the food, feed and personal care industries, and has benefited from investment worth several million euros from private equity funding in recent years.

Last year the venture-capitalist backed company divested its micro-organism based flavonoid production platform, which was bought by French biotech firm Alderys, and sold its patents and technology for the production of vanillin to Solvay, in order to focus on seaweed extracts.

It also entered into a strategic alliance with Chilean carrageenan manufacturer Gelymar with a view to identifying and extracting high interest molecules. Under current methods for commercial seaweed extraction, only around 20% of the raw material is used with the remainder considered to be waste.

This article was updated on 26 September to confirm Maabarot Products as Algaia's new strategic investor.

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