Israel-based ingredients company Frutarom has acquired 50% stake in Algalo Industries to fortify its position in algae-based products segment.
Frutarom has invested NIS10m ($2.6m) to acquire the stake.
As part of its growth strategy, Frutarom will build a state-of-the-art biotechnology facility which will focus on cultivation, harvesting, and processing of algae using advanced scientific methods. Through this share purchase, Frutarom has bought the exclusive worldwide marketing rights of Algalo products.
Algalo is a biotech startup company that develops unique and innovative method for the efficient cultivation, harvesting and processing of an expansive range of algae which produce active ingredients that can be used in food, dietary and clinical nutrition supplements and cosmetics industries.
The technology developed by Algalo facilitates efficient cultivation of algae that contain high concentration of active elements.
Algalo will join Frutarom's established activity of algae cultivation and production of active ingredients.
Frutarom Group president and CEO Ori Yehudai said: "The investment in Algalo is part of a broad strategic move by Frutarom to reinforce its position and standing as a leading and innovative global supplier of natural specialty products and functional food ingredients in the fields of taste and health which already now make up over 75% of Frutarom's activity.
"The technology developed by Algalo for cultivating, harvesting and processing algae expands Frutarom's internal research and development capabilities for producing active ingredients from algae, a field in which we are already active, and provides an innovative platform and an additional growth engine for expanding Frutarom's diverse product portfolio in the growing field of natural specialty ingredients. We will work towards leveraging the cross-selling opportunities arising from this investment by expanding Frutarom's product portfolio and technological abilities and by presenting Algalo's innovative products to our thousands of customers worldwide."
Frutarom is involved in two core activities. The flavors activity develops, produces and markets flavor compounds and food systems. The Specialty Fine Ingredients Activity develops, produces and markets natural flavor extracts, natural functional food ingredients, natural algae-based biotechnical products, natural food colors, natural pharma/nutraceutical extracts, aroma compounds, natural substances for food protection, distinctive citrus products, essential oils, natural gums and resins.
The target customers for the Specialty Fine Ingredients products are the food and beverages, flavor and fragrance, pharmaceutical/nutraceutical, cosmetics and personal care industries.
Recently, Frutarom acquired Austria-based savoury flavor maker Wiberg for $130.4m, marking its largest acquisition ever. The takeover added to its 12 other acquisitions undertaken in 2015 to bolster its position in savoury ingredients segment.
Image: Frutarom to focus on algae-based products. Photo: Courtesy of Mister GC/FreeDigitalPhotos.net.