IFF invests in Asia as demand grows for packaged foods

12-Jan-2011 - Last updated on 12-Jan-2011 at 15:49 GMT

International Flavors and Fragrances (IFF) has said it plans to invest $100m in two new flavor facilities in Asia over the next three years, responding to increasing demand from Asian food manufacturers.

Demand for flavors has taken off in Asia as more consumers look to convenience foods for new flavor experiences, and disposable incomes have grown.

VP Flavors, Greater Asia, Eduardo Alejandrino told FoodNavigator-USA.com: “[The investment is driven by] the growing need of our clients…The economy is really booming in Asia. The middle class is really expanding. More consumers can afford to buy packaged foods so food manufacturers are more confident in developing new products.”

The new facilities will be located in Singapore and Guangzhou, China, where IFF already has production sites, allowing it to use many of its existing resources in the region. The investment will allow the company to triple production capacity, Alejandrino said, with the expanded capacity expected to come online by Q2 2012.

He explained that the Singapore facility will specialize in liquid flavor and fragrance compounds, with a particular focus on the South East Asian market, while the Guangzhou facility will cater to the Chinese market alone, and supply all product types.

When asked about potential challenges in the Asian flavor market, Alejandrino said that speed is a major issue, as there is a demand for product launches to happen very quickly.

“The pace is very fast because the market is expanding very fast,” he said.

Commenting on the investment, IFF chairman and CEO Doug Tough said in a statement: “As growth in this region continues to accelerate, it is important that we align our infrastructure to support our capacity requirements. Today’s investment reflects our continued confidence in our growth strategies in the region and our long-term commitment to these very important, emerging markets.”

This latest move in Asia builds on IFF’s previous investments in the region. In February 2009, the company opened a creative center in Shanghai, including a consumer insight center, in addition to its creation and application facilities, in order to help facilitate deeper understanding of flavor and fragrance preferences in the region.

Tough said: “On the heels of the investment into our Creative Center in Shanghai, today’s announcement underscores our belief in the region, the strength of our Asian teams, and IFF’s dedication to serving the present and future needs of our customers.”