Exter eyes geographical, product expansion in the mid-term

By Jess Halliday

- Last updated on GMT

Related tags: Economics, Netherlands

Dutch flavour firm Exter is considering investing in new production
facilities in the US or Asia in the years to come, and may also
expand its product offering to other ingredients that impact on
savoury flavour.

The company, which specialises in flavour ingredients and hydrolysed vegetable protein (HPV), was acquired from DSM by holding group Oterap in 2003. Although as a private company it does not release financial results, director of sales and marketing Lambert ten Haaf told FoodNavigator.com that it has experienced growth in the last three years. In 2007 the growth rate was between 20 and 25 per cent, he said. Exter currently has one production facility, in The Netherlands. It still has the capacity to expand here, but the company's philosophy is to be close to the consumer and build a "fast, flexible and personal relationship"​. Thus, as it expands its business around the world, Exter may look to establish new facilities in its high potential markets such as North America or Asia. International markets ​Last year the main driver of growth came from Western Europe and North America. Ten Haaf described the latter as "a very nice business, even against the rate of the dollar"​, because of the unique products and clean label offering. ​Although Exter's oven-dried Maillard reaction flavours, plus HVP, have played an important role in this, the new natural flavour range, announced just last week, will give an additional boost on the back of natural, healthy and clean label trends that are marching across these markets. Opportunities for expansion also exist in emerging markets. Exter has doubled its business in Asia and Eastern Europe, albeit starting from a small base. Acquisition or partnership? ​ Ten Haaf said it is yet to be determined whether the expansion will come about through establishing a plant from scratch, acquisitions, or a joint venture. "It depends on the opportunities passing by." ​ The time scale for the move is one to three years, however he confirmed that the company does have the financial resources to hand should a suitable opportunity present itself in the near future. Ten Haaf declined to give details of current capacity in The Netherlands, since the production time varies for its ingredient offerings. Product expansion ​Ten-Haaf said that while Exter's core competency lies with its flavour ingredients, in the mid- to long-term it will also look to add complementary products to its portfolio. While at this stage he could not say for sure what these ingredients may be, they would "add something to savoury flavour"​ - such as spices, herbs and soy sauce do. Again, such an expansion could come about in a number of ways: acquisition, joint venture, or commencing manufacturing off its own back. As for the market, ten Haaf said Exter already has contact with customers that buy these kinds of ingredients. It wants to be a player of greater importance for these customers, meeting more of their savouring ingredient sourcing needs. Oterap philosophy ​Oterap is named after the Italian economist Pareto - but spelt backwards. It was Pareto who introduced the 80:20 economic principle followed by the majority of large companies: that is, focus on the 20 per cent of products that bring in 80 per cent of the business. Oterap's founders saw, gives an opportunity for smaller companies to move in on the smaller business areas.

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