CP Kelco and Noviant, part of JM Huber, announced today (Monday) that the companies will henceforth operate as one business under the CP Kelco name.
Chicago based CP Kelco said that this agreement would not affect Noviant's portfolio and the full line of the company's products, such as FinnFix and Cekol cellulose gum, would continue to be available.
The combined business is an industry leader in specialty hydrocolloids, including biogums, pectin and carboxymethyl cellulous (CMC), as well as carrageenan.
"Both businesses have well-established product lines, and the CP Kelco brand name is widely recognized in the industry. By keeping the CP Kelco name and products - and by retaining the well-established Noviant product line - we capture the best of both businesses," said Tom Lamb, CEO of CP Kelco.
Finnish company Noviant, the world's biggest producer of CMC with a 30 percent slice of the world market, was bought by JM Huber in January 2001 - a move which brought Huber into the world of stabilisers and suspending agents.
CMC is used extensively in food formulations such as dressings, ice cream, baked goods, puddings and sauces to stabilise, thicken and bind.
CP Kelco was then snapped up by Huber in October 2004, the latter company therefore buying its way into the number one pectin and xanthan gum slot.
Terms of the deal were not disclosed, but industry observers pitched the acquisition in the region of $1 billion.
CP Kelco, formed in September 2000 from Hercules' Food Gums division and Kelco Biopolymers division of Monsanto Pharmacia, is currently the number one supplier of pectin and xanthan gum, both used extensively by the food industry as thickeners and stabilisers.
With a total market value in the range of €230 million, xanthan volumes are approximately 40-50 m tons per year, of which about 60 percent is used in the food and pharmaceutical market. Growth rates for xanthan gum are currently coming in at the higher end - 5 percent - of the generally lacklustre growth figures in the food ingredients industry.
"Xanthan is still one of the fastest growing hydrocolloids. Its versatility and, now its low price, make it a hydrocolloid of choice," said Dennis Seisun from market analysts IMR International recently.