Natural ingredient firm Frutarom is expanding its horizons in the promising world of algae-based biotech products with an investment in Israeli start-up company Algalo Industries; in a move that could impact its cosmetics and food interests.

Frutarom will invest a total of NIS 10 million (approx. €2.4 million) in exchange for the allocation of 50% of Algalo shares  to build  a modern biotechnology facility that will specialize in cultivation, harvesting and processing algae using advanced methods.

Frutarom will also have exclusive worldwide marketing rights for Algalo products.

The biotech start-up will join Frutarom's well-established activity in the field of algae cultivation and production of active ingredients (polysaccharides) currently being used by some the world's leading cosmetics companies for use in their skin care and protection products.

"The size of the algae-based ingredient market is estimated to be hundreds of millions of dollars and has enjoyed double-digit growth over recent years,” says Ori Yehudai, President and CEO of Frutarom Group.

“We foresee the rapid growth in this market continuing in coming years in light of consumer trends towards healthier and more natural products that drive the food, nutritional supplements and cosmetics companies to be innovative in developing natural ingredients and efficient in their production processes and cost structure.”

The attraction to Algalo was due to its unique technology which allows for the efficient and competitive cultivation of algae containing high concentrations of active elements.

"The technology expands Frutarom's internal research and development capabilities for producing active ingredients from algae, a field in which we are already active, and provides an innovative platform and an additional growth engine for expanding Frutarom's diverse product portfolio in the growing field of natural specialty ingredients,” continues Yehudai.

The plan for Frutarom now is to work towards leveraging the cross-selling opportunities arising from this investment by expanding its product portfolio and technological abilities, as well as by presenting Algalo's products to its global customers.

"Frutarom believes that biotechnology represents the next generation in the development and production of innovative natural ingredients for the industries which it serves,” adds Yehudai.

Cosmetics Design-Europe (08/01/2016)