NEW YORK —American ingredients supplier, International Flavors & Fragrances has agreed to divest its fruit preparation business to Portuguese based food ingredients supplier Frulact, for an undisclosed sum.
IFF’s fruit preparation business produces fruit, vegetable, herb, meat and fish preparation systems for the food, beverage and pet food markets.
A statement from IFF revealed that the business, whose divestment is expected to close in the third quarter, contributed about US$70 million to sales in 2020.
The division will now become part of Frulact which globally serves a range of dairy, beverage and ice cream producers.
The company has production bases in Portugal, France, Canada, Morocco and South Africa. Ardian, a private investment firm, owns Frulact.
“This is our first step in terms of our portfolio optimization strategy,” said Andreas Fibig, chief executive officer of IFF, in a May 11 earnings call to discuss first-quarter results. “So I expect more news as we progress through 2021.”
IFF sustains US$42m loss
The sale comes as new York-based IFF sustained a loss of US$42 million in the quarter ended March 31, as compared to net income of $124 million, in the previous year’s first quarter.
The company attributed the underperformance to a loss of $US86 million on deferred income taxes and a loss of $208 million on other liabilities.
Despite the losses, the sector had its own positives. The company for instance achieved 3% combined sales growth compared to the first quarter of 2020.
Net sales in the quarter also jumped 83% to US$2.47 billion from US$1.35 billion, driven primarily by the incremental sales related to the merger with DuPont Nutrition & Biosciences, which was completed in the quarter.
Regionally, North America delivered strong growth while Latin America managed to register an 11% growth, buoyed by Brazil and South Cone, which both registered double digit growths in Q1.
IFF’s Nourish division achieved combined currency-neutral sales growth of 1%, led by robust performance in Flavors.
The ingredients company however noted that pandemic-driven headwinds still continued to affect Food Design, which is driven primarily by continued declines in Food Service.
On the company’s integration progress, CEO Andreas Fibig noted that his company had “achieved several financial organizational integration milestones, which reflect the incredible efforts of our global team.”
He further noted that his team had managed to complete all IT migration from DuPont to IFF, and are on schedule regarding exiting many of our transition service agreements with DuPont.
On future outlook, Fibig said, “As we move into the second quarter, we remain squarely focused, leveraging our new capabilities to reach our business objectives, and further establish ourselves as an innovation leader in a global value chain for consumer goods and commercial products.”
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