Chinese opportunity for flavors: Firmenich takes minority stake in ArtSci

20 Jun 2019 --- Firmenich has announced a strategic partnership with ArtSci Biology Technologies, taking an undisclosed minority equity stake in this leading local flavor company in China. Building on Firmenich’s distributor agreement with ArtSci, this investment will further expand the Group’s reach across Central and Western China’s middle-market where ArtSci is strongly established. Headquartered in Hangzhou, in the Zhejiang province, ArtSci specializes in dairy and beverages and is known for its “agility and speed in servicing mid-sized customers.”

“For more than three decades, Firmenich has been deeply committed to investing and growing in China,” says Patrick Firmenich, Chairman Firmenich. “This strategic partnership with ArtSci reinforces our long-term commitment by expanding our reach across China’s middle-market,” he adds.

Founded in 2005 and headquartered in Hangzhou, Zhejiang Province, ArtSci is a Chinese flavor company specialized in dairy and beverages, as well as bakery and confectionery. With more than 130 employees, it serves China’s middle market with a broad distribution network across Central and Western China.

Gilbert Ghostine, Firmenich CEO (left): “I am delighted about our reinforced partnership with ArtSci, building on our successful distributor agreement, as it opens new avenues of growth across Central and Western China for both of us.”“We are delighted to be partnering with Firmenich, a world leader in taste with world-class technologies and innovation,” says Wang Ying, Chairman ArtSci. “With our strategic partnership, we can offer a broader portfolio of solutions and strengthened capabilities to our customers across China to best meet their needs today and in the future.”

“Firmenich has great ambitions in China, as evidenced by our recent strategic investments,” says Gilbert Ghostine, Firmenich CEO. “I am delighted about our reinforced partnership with ArtSci, building on our successful distributor agreement, as it opens new avenues of growth across Central and Western China for both of us.”

ArtSci is a leading Chinese flavor house specializing in Dairy and Beverages with a strong presence across China’s middle market, as well as a large distributor network across the fastest growing regions of Central and Western China. It is recognized in China for its best-in-class service levels, as well as agile and fast speed business model.

A firm believer in the great potential of China, Firmenich, the world’s largest privately-owned perfume and taste company, has been investing consistently over the last 30 years to expand its footprint and capabilities in this strategic market. Most recently Firmenich launched its largest flavor manufacturing plant in the world in Zhangjiagang, adding to its facilities in Shanghai and Kunming serving its Perfumery and Ingredients Businesses. 

Last year, it also entered a strategic partnership with Layn Natural Ingredients based in Guangxi, for exclusive access to the industry’s widest range of natural sweeteners, such as monk fruit and stevia. In 2012, Firmenich opened a major Research Center in Shanghai, dedicated to driving cutting edge technologies to best serve its customers in China. Firmenich has a nationwide presence of commercial facilities with application laboratories in Shanghai, Beijing and Guangzhou.

The news comes as major suppliers eye new growth opportunities that specifically target Chinese tastes. A 2018 Innova Market Insights survey found that two-thirds of Chinese consumers agreed with the statement “I love to discover new flavors.” Over 60 percent agreed that they “love to discover flavors from new cultures.” A surprisingly large 21 percent said that “the crazier the flavor, the better.”

In March, FoodIngredientsFirst reported on how Firmenich had opened its largest flavor manufacturing plant in the world in the Zhangjiagang Free Trade Zone in China. Operating with digitally-advanced manufacturing systems and the highest quality, health, safety, security and environmental standards, this state-of-art plant is designed to best meet growing customer demand in China, with increased speed, operational excellence and traceability.

Last month, Firmenich revealed plans to acquire a majority stake in VKL Seasoning Pvt. Ltd, an India-based specialist in seasonings and flavors, from True North, an Indian private equity company. With this venture, Firmenich is hoping to broaden its capabilities and customer reach in the subcontinent, a noted growth market for the group, while expanding its raw material palette for clean label ingredients.