Firmenich opens largest flavor plant in China's Jiangsu

Firmenich, the world's largest privately owned perfume and taste company, plans to further its efforts to better meet the growing customer demand in China and eyeing further growth opportunities, after opening its largest flavor manufacturing plant in the Zhangjiagang Free Trade Zone in Jiangsu province.

The first phase of the new plant has an investment of $75 million and an annual capacity of 12,000 metric tons. It will provide Chinese consumers with a broad range of local flavors in products like dairy drinks, tea and noodles.

"This strategic investment, representing our biggest operational investment in the last few decades, is the most concrete sign of our deep commitment to China. As our largest flavor plant in the world, Zhangjiagang confirms our firm commitment to best support customer growth in this strategic market," said Gilbert Ghostine, chief executive officer of Firmenich.

According to Ghostine, the Zhangjiagang plant has a total designed annual capacity of 25,000 tons, which "not only benefits the Chinese market, but also Firmenich globally".

China's consumption of flavor and fragrances has soared significantly along with the nation's economic development and growing middle-income group, said Cai Zhihao, a researcher from the Shenzhen, Guangdong province-based Qianzhan Industry Research Institute.

Such market in China surged from 13 billion yuan ($1.94 billion) in 2005 to 33.85 billion yuan in 2015, according to data from the China Association of Fragrance Flavor and Cosmetic Industries.

According to Qianzhan data, China's annual sales revenue from flavors and fragrances for 2018 is expected to be around 40.32 billion yuan in 2018, accounting for 24 percent of the global consumption.

Olegario Monegal, president of Firmenich China, said initiatives like the Healthy China 2030 and the Belt and Road Initiative will have a positive effect on business.

As a result of the government push, as well as better education, consumers are asking for more high-end, high-quality and healthier products. At the same time, China is getting ready not just to supply products for internal consumption, but also finished products to countries and regions related to the BRI.

China has become the second biggest market after the United States for the Geneva-based Firmenich.

"We see China as the biggest growth opportunity for Firmenich. That is why our investment here is the biggest that we have done in the last three decades," said Ghostine.

He added that Firmenich is the only company in the fragrance and flavor industry to have a major center of research in China. In 2006, Firmenich opened its second-largest research center (after the one in Geneva) in Shanghai.

According to Boet Brinkgreve, chief supply chain officer of Firmenich, the new plant with an automation rate of 70 percent, will help boost customer services, with international standards of quality, safety and sustainability.

The new facility complements Firmenich's existing manufacturing sites in Shanghai and Kunming and extensive network of commercial facilities from Shanghai and Beijing to Guangzhou.