Innophos sets up local unit to tap China market

By Ankush Chibber

- Last updated on GMT

Innophos Holdings Inc. has set up a new subsidiary in China to develop on the ground direct sales and technical service capabilities in the country, where it sees a strong potential for growth.

New Jersey, US-based Innophos is a maker of specialty phosphate products, and performance-critical ingredients with applications in the food and beverage markets amongst others.

According to an announcement this month, Innophos (Taicang) Food Ingredients Manufacturing Co. Ltd. was organized as a “wholly foreign owned enterprise” in April this year.

The company has already obtained the necessary business license to operate in China and is expected to begin servicing customers in the third quarter of 2011.

Under the new step, Innophos Taicang will also set up a modern food grade specialty phosphate facility in Taicang City, located approximately 40 kilometers from Shanghai.

“The new facility, which will manufacture specialty ingredients focusing on the developing food and beverage markets in China, is expected to be operational by the first half of 2012,”​ said Alexandra Trammont, a spokesperson for Innophos.

On why Innophos decided to go local for China, Trammont said that Innophos had been importing into China for some time with some good success but recognized that to grow from this point it would require a local presence.

“Management feels that by having tech service, selling and some local manufacturing which is initially on the blending side, it could provide some additional capability and success in China satisfying the local markets,”​ she said.

In an earnings call after the announcement was made, CEO Randy Gress revealed that the company’s initial investment in the China unit would not require a significant capital.

He also revealed that the China subsidiary will be primarily focused on developing customized special ingredient blends and is expected to serve the neighboring markets in Asia as well.

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