Ingredion looks east: Specialty ingredients giant to invest US$60 million in APAC expansion

27 Sep 2018 --- Ingredion has announced US$60 million of planned investments to grow its specialty food ingredients business in Asia-Pacific. Beginning earlier this year, the company commenced expansion of its modified and clean-label specialty starch capabilities in tapioca, waxy corn and rice. 

The company's specialty capital investment projects include:
- A 20 percent expansion of its tapioca modified food starch capacity in Thailand along with state-of-the-art upgrades to its wastewater treatment facilities.
- More than doubling the capacity and increasing the regulatory standards of its specialty rice starch and rice flour business in Thailand, which it acquired in 2017.
- Completing a 30 percent expansion of its modified food starch capacity and further improving its corn wet milling capacity in China. 

“These strategic investments are designed to accelerate our growth and strengthen our manufacturing network in Asia to meet increased consumer demand,” says Jim Zallie, Ingredion President and Chief Executive Officer. “Growing our global specialties business to $2 billion in annual sales by 2022 is an integral part of our strategy to deliver long-term profitable growth and enhance shareholder value.”

"Our specialty investments in Asia-Pacific enable us to grow alongside our customers, improve our overall productivity and ultimately lower our production costs. Through our actions, we are able to provide greater future value to our customers by offering more functional and affordable ingredient solutions," Jim Gray, Ingredion's Executive Vice President and Chief Financial Officer tells FoodIngredientsFirst.

In a recent interview with The World of Food Ingredients, Zallie stressed strong regional expansion plans. “Our global reach and footprint provide excitement, but when you look at our sales to customers to population ratio, there are opportunities. If you take North America for Ingredion, 61 percent of our sales are there, as well as 39 percent of customers. But it only represents 7 percent of the world’s population. In contrast, Asia Pacific represents just 12 percent of sales, 25 percent of customers, but 57 percent of the world’s population,” he said. 

“My point is that Ingredion today has sales of more than one million dollars in 65 countries around the world, which represents 80 percent of the world’s population. Considering sales to customer population ratio and how global we are, we feel excited that we can leverage the global operating model with headroom for growth where we are underrepresented from a sales to population ratio. We are focused on getting more balance in our portfolio but we are represented strongly in every region. For example, 17 percent of our sales are in South America, while 12 percent are in Asia-Pacific. We would like to diversify and grow in EMEA and Asia-Pacific, but this doesn’t preclude us from seeking out good assets to enhance our portfolio but also give us new technologies and good talent from around the world. From a sales representation standpoint, those three regions outside of North America will be a focus for us for more balance,” he added.

With annual net sales of nearly $6 billion, Ingredion turns grains, fruits, vegetables and other plant materials into value-added ingredients and biomaterial solutions for the food, beverage, paper and corrugating, brewing and other industries. The company operates four manufacturing facilities in Thailand and three manufacturing facilities in China.

“We see growing demand for both clean label ingredients and specialty starch-based texturizers throughout the region,” says Valdirene Licht, Ingredion Senior Vice President and President, Asia-Pacific. “The investments will allow us to continue to evolve with our customers to provide innovative, on-trend solutions. Our local team has extensive applications and formulating expertise combined with the broadest and deepest portfolio of waxy corn and tapioca based specialty starches and a successful track record of supporting customers in the region for more than three decades. We're now excited to be building our on-trend rice ingredient business and we will continue to make further investments in Asia that benefit our customers globally.”

“The actions being taken in Asia are consistent with our global strategy to invest in our specialty starch franchise and expand our capabilities to innovate and offer more customized solutions for our customers around the world,” adds Zallie.

"We are continuing to execute our strategy," says Valdirene, Vice President at Ingredion. "We have a global footprint, broad product portfolio, and focus on higher-value specialty products drive growth and balance risk to deliver shareholder value. We manufacture ingredients around the world, have a presence in over 40 countries and sell to more than 18,000 customers in more than 120 countries. The vast majority of our ingredients are made and used locally, and our geographic diversity balances country-specific risks."

"We expect growth in the specialty starch market as consumers are increasingly interested in wholesome foods with 'clean-label' ingredients. Building off of our successful track record of innovations with tapioca and waxy corn, we’re now further building out our rice to grow our specialties business in Asia," Valdirene adds.

By Robin Wyers