FMC Corp. acquires hydrocolloids business of International Specialty Products for undisclosed sum

Chemical maker FMC Corporation is acquiring the hydrocolloids ingredients business of International Specialty Products (ISP) to expand its alginate profile and strengthen cost competitiveness. ISP is currently the leader in alginate production, and FMC is second placed. With this move, FMC catapults straight to the top.

The acquisition includes a manufacturing plant in Girvan, Scotland, and employees at the plant but not its Germinal blending business based in Brazil. Financial terms for the deal were not disclosed. The hydrocolloid ingredients business of ISP reported revenue of $80 million last year.

The companies expect to close the transaction following satisfaction of customary closing conditions. The newly acquired business will be integrated into FMC Specialty Chemicals Group's biopolymer division.

Alginates are extracted from seaweed and are one of the most versatile biopolymers used in a wide range of food, pharmaceutical and specialty applications. Food blends are comprised of specialty hydrocolloids that provide unique functionality in a variety of food uses. Hydrocolloids have been subject to rising raw material and energy costs, which have affected manufacturers across the board.

Useful applications for alginate include fruit filling and fruit spreads, as the product can be used to restructure the leftovers of fruit and vegetable products after their processing. The increasing demand for healthy, low-fat products has provided new innovation opportunities for manufacturers of some hydrocolloids, which can be used as replacers. Food manufacturers across the board have been investing in solutions for healthy products that still taste good to meet the demands of the health conscious consumer.

FMC said it hopes the acquisition will establish it firmly as a leader in the hydrocolloids market, and it part of a wider global supply growth strategy. In January, it expanded its microcrystalline cellulose (MCC) production to meet growing demands from the food industry, particularly for low fat products.

"The integrated business will enable FMC to offer customers a broader range of alginates and functional system blends and improve our geographic coverage in key markets." said Ted Butz, vice president and general manager, FMC Specialty Chemicals Group. "This move will further strengthen our global cost competitiveness by increasing our capabilities to source raw materials, drive production efficiencies and deliver improved supply chain economics."

FMC Corporation is a chemical manufacturing company headquartered in Philadelphia, Pennsylvania. FMC employs over 5,000 people world wide, and had gross revenues of over $2 billion in 2004. The company operates its businesses in three segments: agricultural products, specialty chemicals and industrial chemicals. In 2006, it celebrated 75 years of being listed on the New York Stock Exchange.