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Report Date : |
20.06.2014 |
IDENTIFICATION DETAILS
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Name : |
FRUTAROM LTD. |
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Registered Office : |
P.O. Box 10067 (2611001) 25 Hashayish Street Haifa Bay Industrial Zone Haifa 2629183 |
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Country : |
Israel |
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Date of Incorporation : |
04.02.1955 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Developers, producers and marketers in the fields of flavors and fragrances for the food & beverages, personal care |
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No. of Employees |
310 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
Israel |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderate Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderate High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
ISRAEL ECONOMIC OVERVIEW
srael has a technologically advanced market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among the leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are covered by tourism and other service exports, as well as significant foreign investment inflows. Between 2004 and 2011, growth averaged nearly 5% per year, led by exports. The global financial crisis of 2008-09 spurred a brief recession in Israel, but the country entered the crisis with solid fundamentals, following years of prudent fiscal policy and a resilient banking sector. In 2010, Israel formally acceded to the OECD. Israel's economy also has weathered the Arab Spring because strong trade ties outside the Middle East have insulated the economy from spillover effects. The economy has recovered better than most advanced, comparably sized economies, but slowing demand domestically and internationally, and a strong shekel, have reduced forecasts for the next decade to the 3% level. Natural gas fields discovered off Israel's coast since 2009 have brightened Israel's energy security outlook. The Tamar and Leviathan fields were some of the world's largest offshore natural gas finds this past decade. The massive Leviathan field is not due to come online until 2018, but production from Tamar provided a one percentage point boost to Israel's GDP in 2013 and is expected to contribute 0.5% growth in 2014. In mid-2011, public protests arose around income inequality and rising housing and commodity prices. Israel's income inequality and poverty rates are among the highest of OECD countries and there is a broad perception among the public that a small number of "tycoons" have a cartel-like grip over the major parts of the economy. The government formed committees to address some of the grievances but has maintained that it will not engage in deficit spending to satisfy populist demands. In May 2013 the Israeli government, in a politically difficult process, passed an austerity budget to reign in the deficit and restore confidence in the government's fiscal position. Over the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultra-orthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only 9% of the workforce, with the rest employed in manufacturing and services - sectors which face downward wage pressures from global competition
|
Source
: CIA |
FRUTAROM LTD.
Telephone 972 4 846 24 62
Fax 972 4 872 25 17
P.O. Box 10067 (2611001)
25 Hashayish Street
Haifa Bay Industrial Zone
Haifa 2629183 Israel
A private limited company, incorporated as per file No. 51-013293-9 on the 04.02.1955, continuing activities which were originally established in 1933.
In February 2005 BALTIMOR SPICE ISRAEL LTD., was merged into subject
In November 2009 RAYCHAN BEEROT ITZCHAK FOOD INDUSTRIES LTD. was merged into subject.
Authorized share capital NIS 27,000,000.00, divided into -
27,000,000 ordinary shares of NIS 1.00 each,
of which 23,972,645 shares amounting to NIS 23,972,645.00 were issued.
Company is fully owned by FRUTAROM INDUSTRIES LTD., a public limited company, shares of which are traded on the Tel Aviv Stock Exchange and London Stock Exchange, controlled (36.7%) by I.C.C. INDUSTRIES INC, controlled by Dr. John Farber.
1. Ori Yehudai, President and Chief Business Manager,
2. Alon Granot, Vice President and CFO,
3. Amos Anatot.
Dr. John Farber is the Chairman of FRUTAROM INDUSTRIES.
Developers, producers and marketers in the fields of flavors and fragrances for the food & beverages, personal care and more, in 2 lines:
Flavors Division (constituting 73% of the company's sales volume) flavors, savory solutions, seasonings and food systems.
Specialty Fine Ingredients Division, natural flavor extracts, functional food ingredients, natural pharmaceutical/ nutraceutical extracts, specialty essential oils, citrus products and aroma chemicals.
Also traders, importers and marketers of raw materials for the food and beverages industries.
Subject heads the industrial, commercial, export and marketing activities of FRUTAROM INDUSTRIES.
Over 93% of the goods (over 31,000 products) are exported to over 15,500 clients in over 145 countries worldwide.
Main Customers: COCA-COLA, PEPSICO, NESTLE, UNILEVER, JOHNSON & JOHNSON, etc.
Among local suppliers: SAM-ON LABORATORIES, NEGEV SPICES, DORMEX TRADING & INVESTMENTS CO., DAGAL FOOD ADDITIVES, DEPOTCHEM, HADAR 2000 PLATFORMS, OROKIA ISRAEL, etc.
Operating from owned premises (headquarters and plant), on an area of 35,490 sq. meters in 25 Hashayish Street, Industrial Zone, Haifa Bay, Haifa, and from plants: in 10 Baltimore Street, Industrial Zone Acco South, Acre (or Acco, on an owned area of 9,273 sq. meters). These are subject's 2 main local plants. Also operating from 2 small plants in Mishor Adumim Industrial Zone, and in Gilat. Subject is also operating from offices in 34 Pinchas Rosen Street, Herzliya. The Group operates also from 33 production plants worldwide, 38 R&D centers and from 69 sales offices worldwide (please also refer to NOTE at bottom).
Having some 2,700 employees serving the whole FRUTAROM Group (had 2,021 employees in the end of 2012), of which some 310 employees in Israel.
Note: number of employees has increased further following the acquisitions FRUTAROM made during 2013.
Parent FRUTAROM INDUSTRIES current market value US$ 1,402.4 million.
Subject is an “Approved Enterprise” and as such enjoys tax benefits and State incentives. In 2000 and in 2002, the Israeli Investment Center (IIC) approved NIS 19 million and US$ 2.54 million investment plans, respectively, in the expansion of subject’s existing plant.
In December 2002, IIC approved a NIS 90 million investment plan in the erection of the Group’s new plant.
In October 2012 FRUTAROM announced on the erection of an additional plant in Northern Israel, to serve also as R&D center, with total investment of NIS 110 million (part will be given as grant from the State, as an Approved Enterprise).
In February 2005, parent
published a prospectus offering shares to the public on the London stock
exchange, raising a sum of US$ 71 million, according to a company value of US$
435 million.
In its 2013 annual statements, FRUTAROM announced that intends to invest US$20 million-US$ 24 million each year for the next 3 years in production line upgrading, implementation of procedures, etc.
There are no charges registered on the company's assets.
Financial data is included in the consolidated B/S of parent company,
FRUTAROM INDUSTRIES LTD., which shows:
(Note: All of FRUTAROM INDUSTRIES business and production activities are concentrated and held by subject hence the financial statements practically reflects subject's status):
US$
(thousands)
31.12.2013 31.03.2014
ASSETS
Current assets:
Cash and cash equivalents 57,612 49,842
Customers 138,373 149,134
Other debtors and pre- paid expenses 24,245 29,026
Stock 154,721 163,151
374,951 391,153
Non-current assets:
Fixed assets, net 208,567 211,666
Intangible assets, net 383,729 282,593
Other non-current assets 3,539 3,645
595,835 597,904
970,786 989,057
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LIABILITIES
Current liabilities 219,396 197,110
Non-current liabilities 230,331 263,966
Equity 521,059 527,981
970,786 989,057
======= =======
Subject ended 2009 with a net profit of US$ 33,436,000.
Subject ended 2010 with a net profit of US$ 37,189,000.
Subject ended 2011 with a net profit of US$ 44,487,000.
Subject ended 2012 with a net profit of US$ 53,702,000.
Subject ended 2013 with a net profit of US$ 68,015,000.
FRUTAROM INDUSTRIES LTD.
Consolidated Statement of Income
US$ (thousands)
Year ended 31.12
2011 2012 2013
Sales 518,443 618,001 673,693
Gross profit 188,577 226,259 256,796
Operating income 58,664 72,848 86,757
Profit before taxes on income 52,866 65,608 79,229
Net income 42,031 51,980 63,621
======= ======= =======
FRUTAROM INDUSTRIES consolidated revenues for the first 3 months of 2014
were US$ 188,467,000 (24% increase compared to the parallel period in 2013),
making a gross profit of US$ 73,540,000, an operating income of
US$ 23,933,000, and a net income of US$ 18,280,000.
FRUTAROM INDUSTRIES LTD., a holding company.
Subject's subsidiaries (all wholly owned, unless otherwise mentioned):
FRUTAROM TRADE AND MARKETING (1990) LTD.
NUTRA LIZ LTD., 55%
FRUTROM MEXICO S.A., Mexico
TURKISH HOLDINGS LTD., inactive
FRUTAROM RUSSIA LTD.
FRUTAROM KAZAKHSTAN LLP., Kazakhstan
FRUTAROM UKRAINE LTD.
FRUTAROM FLAVOURS (KUNSHAN) CO. LTD., China, holds a subsidiary,
FRUTAROM DO BRAZIL LTDA, Brazil, holds 2 subsidiaries,
INTERNATIONAL FRUTAROM CORP., U.S.A., holds: FRUTAROM USA INC., FRUTAROM USA HOLDINGS INC. (inactive), FSI BEVERAGE SYSTEMS LLC, FSI FRAGRANCE LLC, HAGLIN & CO INC., FRUTAROM F&F COSTA RICA SRL,
FRUTAROM (U.K.) LTD., UK, holds: FRUTAROM NORWAY A.S., FRUTAROM SWITZERLAND LTD. (holding many subsidiaries in chaining), FRUTAROM (UK) LTD. (holding 6 subsidiaries), FRUTAROM ITALY SRL. (holding a subsidiary) and FRUTAROM – ETOL (UK0 LTD. (holding a subsidiary),
FRUTAROM F&F (SHANGHAI) TRADING CO. LTD.
FRUTAROM GIDA URUNLERI SANAYE VE TICARET LTD., Turkey
FRUTROM SOUTH AFRICA (PROPRIETARY) LTD, 75%,
FRUTROM (ASIA PACIFIC) LTD. (holding a subsidiary)
FRUTROM SINGAPORE PTE LTD.,
FRUTROM FLAVORS AND INGREDIENTS (SHANGHAI)
FRUTROM FLAVORS (INDIA) PRIVATE LIMITED.,
FRUTROM NIGERIA LTD.,
ETOL TOVARNA AROM IN ETERICNIH OLJ, Slovenia, holds 7 subsidiaries.
During 2013 subject acquired the following companies:
JANNDEREE (PTY) LIMITED., South Africa,
Vantodio Holdings Limited, 75%, Cyprus, holding PROTEIN TECHNOLOGIES INGREDIENTS, Russia.
INTERNATIONAL AROMA GROUP, Guatemala,
HAGLIN & CO. INC.
Main banks:
Bank Leumi Le’Israel Ltd., Haifa Main Branch (No. 876), Haifa.
The First International Bank of Israel Ltd., Haifa Main
Branch (No. 006), Haifa.
Also working with
Mizrahi Tefahot Bank Ltd., Haifa Business Branch (No. 444), Haifa.
There are several environmental claims and procedures subject was and has been involved in, including a motion for a class action lawsuit. Most claims are on environmental grounds against subject's plant in Haifa Bay for chemical emissions that cause environmental damages. The matter in front of the Ministry of Environment was resolved. In Its 2013 annual report FRUTAROM states that there are no significant legal procedure against Group.
Nothing unfavorable learned apart from that.
Subject estimates the global market in which it operates at US$ 18.5 billion.
According to research firm LEFFINGWELL & ASSOCIATES subject is ranked amongst the 10 largest companies in the world in the fields of food flavors and flavor extracts. According to a report from August 2011, in the local market Group has a 50% market share, in the UK 15% of the sweet flavors market share, and 15% of the Russian savory market.
Until 1996, subject's parent FRUTAROM INDUSTRIES was part of ELECTRO-MECHANICAL INDS. (1952) LTD., when FRUTAROM's activities were split from the latter's and has been operating completely independently since.
*Note: Hereinafter, “FRUTAROM” refers to either subject or parent company, as parent company, as the publicly traded company, is the entity reporting, however in practice most business activities are carried out by subject.
In 2002, FRUTAROM acquired an essence plant in the UK, from RAYNER & COMPANY, for a sum of US$ 2 million.
In 2003, FRUTAROM announced it signed a deal to acquire FLACHSMANN of Switzerland, for a sum of US$ 20 million.
In 2004, subject acquired the Food Systems division (fruit preparation activity) in Germany, Switzerland & France of the European IFF Concern, for €33.5 million.
In 2006, FRUTAROM made the following acquisitions:
70% of NESSE of Germany, producers of savory essences, for a sum of €18.4 million; In May 2008 realized the option for the remaining 30% for €13.75 million
Activities from local company D. HERB LTD., for manufacturing an essence extracted of a plant used for diabetics.
All shares of ACATRIS Group from Dutch ROYAL SCHOUTEN GROUP for €10.5 million in cash (ACTARIS INC’s name was changed to FRUTAROM INC. and so names of its subsidiaries).
In 2006, FRUTAROM made the following acquisitions:
100% of both British companies dealing as manufacturers and marketers of products: BELMAY LIMITED, for US$ 17.1 million; and JUPITER FLAVOURS LIMITED., for US$ 2.8 million. JUPITER activities were merged into BELMAY.
The assets of local company ADUMIM FOOD ADDITIVES LTD., established in 1977, in consideration of US$ 4.25 million, which included manufacturing of emulsifiers and additives for the food industry and natural food ingredients to the health food industry (vitamins, essences, etc.). The acquired activities include the ADUMIM's 45.8% shares in NUTRA LIZ LTD., developers of food additives.
100% of ABACO, of the USA, for US$ 4 million, as well as carrying ABACO's debt of US$ 1.1 million. ABACO, established in 1989, deals as developers and manufacturers of unique raw materials for the flavors industries.
100% of RAYCHAN BEEROT ITZCHAK FOOD INDUSTRIES LTD., local developers, manufacturers and marketers of flavors mixtures and raw materials for the food industry, for US$ 1 million to RAYCHAN's shareholders, as well as assuming RAYCHAN's debt of US$ 12 million. RAYCHAN's activities were merged into NESSE’s local activities.
100% of 2 companies in the German GEWURZMULLER Group, established in 1896, manufacturers of savory essences (GEWURZMULLER GmbH and BLESSING BIOTECH GmbH), in consideration of €47.3 million, in cash.
All the activity of RAD NATURAL TECHNOLOGIES LTD., Israeli company dealing in development, manufacturing and marketing of natural essences from plants, for US$ 4.1 million.
In February 2009 FRUTAROM completed the acquisition of assets and businesses of British firm OXFORD CHEMICALS LIMITED for US$ 12 million. OXFORD, established 1973, has some 70 employees with 2 plants in Northern England and deals in development, manufacturing and marketing of special ingredients for the flavoring industry.
In March 2009 FRUTAROM purchased the assets and activities of American FLAVORS SPECIALITIES INC. (FSI) for US$ 17.2 million in cash. FSI, established in 1979, manufactures flavors in the niche of Botanical Extracts.
In July 2009 subject purchased CHRISTIAN HANSEN of Germany for US$ 7.3 million. CHRISTIAN deals in the Savory fields with 2008 sales of US$ 7.7 million.
In December 2010 FRUTAROM acquired the Industrial Savory activities of REIBER & SON ASA of Norway for US$ 4.2 million.
In January 2011 FRUTAROM acquired the assets and activities (manufacturing and marketing Savory flavors) of EAST ANGLIAN FOOD INGREDIENTS LTD. (EAFI), of the UK, for US$ 4.8 million.
In July 2011 FRUTAROM acquired the savory activities and assets of CHRISTIAN HANSEN ITALIA SPA for € 25 million.
In August 2011 FRUTAROM acquired AROMCO LTD., of UK for US$ 24.7 million. AROMCO, established 1985, develop, manufacture and market flavor extracts, and sells in Eastern Europe, Africa, Asia, as well as England.
In October 2011 FRUTAROM acquired American company FLAVOR SYSTEMS INTERNATIONAL INC. (FSI), specializing in flavor extracts for coffees, for US$ 35.3 million.
In January 2012 FRUTAROM acquired SAVOURY FLAVOURS of the U.K, established in 1999, for around US$ 6 million.
In early 2012 FRUTAROM acquired 63% of the Slovenian-based ETOL Group for € 22.3 million, which specialize in the flavors and savory fields. ETOL has several subsidiaries and employs some 240, with annual sales of € 49 million.
In February FRUTAROM also made its first purchase in Brazil, acquiring MILNER for US$ 15.7 million.
In May 2013 FRUTAROM acquired JANNDEREE of South Africa, developers and marketers of savory flavors, for US$ 5.2 million.
In November 2013 FRUTAROM completed the acquisition of 75% of PROTEIN TECHNOLOGIES INGREDIENTS (via its holding company), manufacturer of flavor extracts, for US$ 50.3 million. FRUTAROM has an option to acquire the remaining 25%. PTI's 2012 sales were US$ 60 million and having 500 employees.
In November 2013 FRUTAROM signed an agreement to fully acquire INTERNATIONAL AROMA GROUP of Panama (flavor manufacturer), for US$ 12.5 million. AROMA's 2012 sales were US$ 6.3 million, having 57 employees.
In December 2013 FRUTAROM signed an agreement to fully acquire HAGLIN & CO. INC of USA (manufacturer of flavors), as well as acquisition of BRC OPERATING CO LLC, for US$ 52.4 million. HAGLIN's 2012 sales were US$ 24.2 million, having 84 employees.
In February 2014 FRUTAROM acquired the activities of CITRASOURCE, of USA, manufacturer of citrus flavor products, for US$ 7.5 million.
Good for trade engagements.
Note: Since February 2013 Israel Post has started using a new area code method of 7 digits (the old method of 5 digits is no longer valid).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
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US Dollar |
1 |
Rs.60.00 |
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|
1 |
Rs.102.05 |
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Euro |
1 |
Rs.81.71 |
INFORMATION DETAILS
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Analysis Done by
: |
SUB |
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Report Prepared
by : |
NIS |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with full
security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
NB |
New Business |
-- |
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This score serves as a reference to assess SC’s
credit risk and to set the amount of credit to be extended. It is calculated
from a composite of weighted scores obtained from each of the major sections of
this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.