Symrise buys UK flavour firm in ongoing market consolidation
top three flavour player, announcing the acquisition of British
flavour manufacturer Flavours Direct, writes Lindsey Partos.
Formed through a merger of flavour houses Dragoco and Haarman & Reimer in 2002, Symrise will take control of the Corby-based UK firm that had €10 million in sales last year at the end of the month.
"Symrise is strengthening its position in Great Britain and Ireland, making the company one of the foremost suppliers of savoury flavours in Great Britain, the largest market for snacks and savoury convenience foods in Europe," said the ambitious German company.
The acquisition will bring a stronger platform to serve the snack market, growing at a rate of over four per cent in Europe and the Middle East, says the firm.
"Flavours Direct will link Symrise even more closely with the key markets in the Europe/Africa/Middle East region," says Andrei Mikhalevsky, president of flavours at Symrise.
Prior to the Flavour Direct deal Symrise held the number four global flavour slot. The firm now claims "this acquisition consolidates Symrise's position as the third-largest provider of innovative flavors worldwide."
Since its formation in 2002, Symrise has demonstrated strong ambitions to improve competitiveness, slashing jobs and setting up production consolidation to eek out more favourable trading conditions.
In November 2004 the firm announced: 580 jobs would go by the end of 2006, with around 350 of these in Germany; employees across the firm would work a 40 hour week replacing the current 37.5 hour week, without wage increases; and a salary freeze for the next two years.
On the production side, Symrise, owned by Northern Europe Private Equity Fonds (EQT), outlined aims to expand its fragrance and flavours production in Holzminden and consolidate production of natural flavouring substances on site, while retaining production in Nördlingen.
The highly competitive flavour industry, valued at €5.8bn in 2003 by IAL Consultants, is driven by the top ten industry leaders that dominate 65 per cent of the total market.
Swiss firm Givaudan tops the stakes with about €1.8bn worth of sales and 13.5 per cent market share, in fourth position prior to the UK acquisition Symrise took about 9 per cent. Average industry growth rate is in the region of 2 to 3 per cent, but at 1.5 per cent Symrise was below this in 2003.
At the beginning of this month Dr. Gerold Linzbach replaced James Forman as CEO of the firm.
