Citrico Rumours
15th September 2004
Rumours of the liquidation of Citrico International have been sweeping through the hydrocolloids industry. However the new pectin factory in Germany is said not to be for sale. Citrico International is in the hands of the liquidator until a buyer for the business can be found, however the plant in Malchin will not file for insolvency. The Malchin plant cost $46.7M and was opened in 2001 with a capacity of 4500t.
Citrico is the newest entry into the pectin producers world and many saw them as a strong competitor with their backward integration into peel. Pectin has become the one remaining, large volume hydrocolloid that still attracts high prices largely because of the few competitors in this field. A strange irony considering pectin is probably the hydrocolloid that has been manufactured for the longest. It was believed in the industry that if anyone was going to attack the highly profitable pectin business and succeed it would be a peel manufacturer and Citrico appeared to fit the bill. How wrong they were!
Pectin manufacturers have been keen to retain their profitable market with consolidation in the market ensuring there are not too many players. The last large shift in the pectin world was the sale of Citrus Colloids to Hercules and the subsequent closure of the Hereford factory.
Who is likely to buy the business? Well there are the few remaining pectin companies who will be keen to stop the business falling into the hands of an aggressive competitor and strengthen their own position. The large manufacturers are CP Kelco, Degussa, Herbstreith & Fox, Obipektin and Danisco. But there are some new companies on the block who might be interested such as the Kerry group who have recently acquired the Quest International hydrocolloids business.