INDIA – Oterra, the world’s largest natural food color manufacturer, has expanded its presence in the natural ingredient market with the acquisition of Akay Group for an undisclosed amount.
Based in Kerala, Akay is a manufacturer of natural ingredients for the food, beverage, and nutraceutical sectors.
Akay’s product offerings include natural colors and flavors, nutraceutical and dietary supplement ingredients, as well as spices and seasonings.
The company serves over 40 countries, has four manufacturing sites in southern India, and employs more than 400 people.
The EQT-owned company, Oterra, said the acquisition provides it with access to an extensive range of natural color products, as well as the use of Akay’s manufacturing plants and R&D capabilities.
Cees de Jong, chairman of Oterra, commented: “Akay is a great strategic match for Oterra. Its portfolio of nutraceutical products complements Oterra’s existing portfolio of products for natural dietary supplements.”
The acquisition by Akay has come at a time when EQT says that the global market for natural coloring ingredients is large and experiencing attractive growth supported by strong secular megatrends.
“The demand for all-natural products in this market is on the rise and so is Oterra,” de Jong observes.
The global investment organization highlights the drivers of the trend include increasing consumer awareness around health, the environment, and the ongoing transition from synthetic components to natural ingredients.
Also, the growing demand for sustainable and plant-based food is also pushing the growth.
According to Allied Market Research, the food colors market size which was valued at US$2.1 billion in 2019, is projected to reach US$3.5 billion by 2027, registering a CAGR of 12.4% in the forecast period 2020 to 2027.
Akay Grou’s acquisition marks the fourth strategic purchase that Oterra has made in the past 14 months.
The recent one was in January when the company acquired the US-based Food Ingredient Solutions, which produces colors and natural antioxidants.
Food Ingredient Solutions serves more than 400 customers annually and has two certified processing facilities, located in Teterboro, New Jersey, and Marshfield, Missouri.
The transaction was expected to allow Oterra to offer its customers and market partners a line of USDA and EU organic-certified colors and strengthen the company’s backward integration of red beet.
Meanwhile, the parent company says Oterra is well-positioned to accelerate organic growth by executing on the significant conversion runway for natural colors, particularly in key growth markets such as the US and Asia.
EQT points out that it has plans to invest significantly in the company’s organization and strengthen its digital infrastructure, sustainability capabilities, and supply chain setup.
Furthermore, Oterra is expected to leverage EQT’s in-house expertise in digitalization and sustainability, and EQT’s global advisory network, which possesses significant experience in developing strong ingredient companies.
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