Frutarom fortifies portfolio with acquisition of AB-Fortis activity

08 Nov 2017 --- Frutarom has signed an agreement with AB-Biotics S.A. of Spain for the acquisition of the activity of AB-Fortis. The patent-protected micro-encapsulation technology enables delivery of iron with increased biological absorption while avoiding the side effects of metallic taste and digestive problems in the applications of functional foods and dietary supplements.

Israel’s Frutarom, described as one of the world's ten largest companies in the field of flavors and natural specialty fine ingredients, says it is continuing the implementation of its rapid and profitable growth strategy, also in natural specialty ingredients for the food, dietary supplement, pharmaceutical and cosmetic industries.

“The acquisition of the AB-Fortis technology continues the fulfillment of Frutarom’s broad strategic drive to strengthen its position as a leading, innovative global supplier of natural specialty products and functional food components in the fields of taste and health,” says Yoni Glickman, President of Frutarom’s Natural Product Solutions Unit.

“AB-Fortis’ unique micro-encapsulation technology expands Frutarom’s diverse product portfolio in the growing field of specialty health ingredients,” Glickman continues. “Delivering iron supplementation in a bioavailable and palatable manner is an important objective for many of our food and supplement customers, and we continue to work with them closely to bring this and other innovative solutions that combine our core competencies in taste and health.”

Innovation to deal with deficiency
The AB-Fortis products provide a unique, innovative way to effectively administer a daily dose of iron, Frutarom reports. After successfully marketing products based on this technology to its customers over the past four years and having accompanied product launches in Europe, Asia and Latin America, Frutarom notes that it has decided to acquire the technology and expand its activity.

Iron is a vital component in building organic compounds, enabling oxygen to be carried by red blood cells and oxygen to be maintained within the cell structure. Iron deficiency constitutes a global health problem in developed and developing countries alike, Frutarom reports.

The deficiency is particularly prevalent in children under the age of 6 among whom iron deficiency is associated with psychomotor and cognitive development, as well as in pregnant women suffering from excess fatigue due to iron deficiency. Among these groups, the percentage of population suffering from iron deficiency reaches 20 percent in developed countries and up to 60 percent in some developing countries, according to a WHO report.

In light of iron’s low solubility, taking iron is usually characterized by low rates of biological absorption, leading to increased dosages and the side effects of metallic taste, problems in the digestive system that could range to the extent of nausea, vomiting and pyrosis, discoloration of teeth and more.

Coating the iron using AB-Fortis’ unique micro-encapsulation technology significantly increases the ability of the iron to be absorbed in the tissues, makes the iron tasteless and allows for the administering of a lower dosage along with a significant reduction in side effects, Frutarom notes.

Portfolio continues to expand
The AB-Fortis activity will join Frutarom’s established activity in specialty fine ingredients, the framework in which Frutarom develops, produces and markets active substances and natural specialty patent-protected extracts with scientifically proven healthy qualities.

“We are continuing to expand the portfolio of natural specialty products we offer our customers – which already now make up over 75 percent of our sales – whether through our in-house R&D or collaborations with universities, research institutes and start-ups, or through acquisitions,” says Ori Yehudai, President and CEO of Frutarom. “As part of the strategy of focusing on natural products with healthy qualities we acquired Grow, Nardi and Extrakt-Chemie in 2016 and Nutrafur and Vitiva in 2015.”

Yehudai notes that in recent years Frutarom also announced the acquisition of specialty nutrition company Enzymotec, which produces and markets specialty ingredients in the field of nutrition and medical food based on a unique technology for processing lipids (organic compounds containing fats) that support important biological functions.

“We will continue carrying out our rapid profitable growth strategy based on combining profitable internal growth and strategic acquisitions which will lead to our attaining the targets we set: sales of at least US$2 billion with an EBITDA margin of over 22 percent in our core activities by the year 2020,” Yehudai concludes.