A groundbreaking ceremony was held on 9 November for the $29 million plant that will focus on the production of aroma chemicals. The factory is expected to open in late 2006 and reach full capacity in 2008.
Within the flavour and fragrance industry, IFF currently has the largest number of ingredient manufacturing locations in the world, with six dedicated plants on three continents. Yet the company says that despite consistent investment in upgrading its existing plants, demand for specialty and proprietary ingredients has grown at such a pace that it made the decision to expand global production capacity.
Richard Goldstein, IFF's CEO said: "The ingredients business is a key part of IFF's ongoing strategy. We have made dramatic investments in this part of the business and we are further affirming our commitment through the construction of this new facility in China."
The new plant will be located on a 16.9 hectare site within the Hangzhou Economic and Technological Development Area (HEDA), a Chinese national-level development area. The investment in HEDA means that the location benefits from infrastructure, including transportation, communication, steam and electricity supply, industrial waste treatment facilities, customs, taxation, and banking services. Hangzhou also has a number of universities, providing a source of high level potential employees and is close to key raw materials necessary for specialty ingredient production.
In addition, the company says that the Hangzhou-based plant will increase IFF's flexibility to reposition products to match demand or competitive situations and expand its base of technical expertise and capabilities. The plant will focus on the production of specialty ingredients and intermediates to satisfy global requirements and other products specifically for regional demand in Asia Pacific.
IFF, which has operations specialising in flavours and fragrances for the food, household and cosmetics industries in 34 countries, has a long history in China, including its existing ingredients facility in Xin'anjiang. The new plant in Hangzhou will further solidify IFF's position in the Asian market and allow the Company to meet growing customer demands in the region and throughout the world.
In recent years the US group has struggled against rising costs, and indeed fell into the red in the financial years 2002 - 2003 as a result. However, a cost cutting strategy implemented in 2003 has shown dividends this year, and, combined with strong sales growth in the Asia Pacific region, the company's turnover increased 15 per cent for the first quarter of 2004, to $535 million.