Azelis (Belgium), a specialty chemicals and food ingredients distributor, based in Europe, announced its 100% acquisition of Chemroy Canada Holding (Ontario, Canada), a privately owned distributor of specialty chemicals and ingredients, on 12th March 2019. The transaction would place Azelis as one of Canada's leading specialty distributors. Additionally, with Chemroy’s dedicated sales force into the food and nutraceutical segments, Azelis will have high growth opportunity in these segments.
MarketsandMarkets™ View Point:
Azelis was founded in 2001 and is headquartered in Antwerp, Belgium. The company supplies chemicals and food ingredients such as preservatives, acidifiers, and sweeteners; it also supplies ingredients for beverages, confectionery, bakery products, dairy products, and desserts. Chemroy distributes similar products and serves the same markets as Azelis. Additionally, Chemroy has warehousing across Canada; it has offices in Laval (Quebec) and Vancouver (British Columbia). Thus, with the help of established distribution channels and sales force of Chemroy, Azelis can benefit and increase its product offerings and sales in North America.
Impact of the Acquisition:
Food processing ingredients are widely used in the bakery, dairy, confectionery, and processed food & beverage industries. North America has a large market for these products; hence, it constitutes a major share in the market. The increasing number of new product launches by food ingredient manufacturers in the market acts as a catalyst for fuelling the demand for food processing ingredients. Thus, with the increased demand for processed foods in the region, the demand for food processing ingredients is also projected to increase in the region. By acquiring Chemroy, Azelis can benefit from its distribution channels in North America, and thus, can increase its sale of food ingredients, with the increased demand for processed foods in the region. The below figure depicts the current market potential of the food processing ingredients market by way of depicting its estimated and projected growth rates.
FIGURE 1 FOOD PROCESSING INGREDIENTS MARKET SIZE, 2018 VS. 2023 (USD BILLION)
e - Estimated; p - Projected
Source: Company Website, Annual Reports, and MarketsandMarkets™ Analysis
Impact on Manufacturers:
Some of the major players in the food processing ingredients market are Archer Daniels Midland Company (ADM) (US), Cargill (US), Tate & Lyle (UK), DuPont (US), and Ingredion Incorporated (US). With the help of increased distribution channels of Azelis and Chemroy, the manufacturers can increase their product reach across North America by collaborating with Azelis.
The demand for processed food is high in the North American region. With the increase in the demand for processed foods, the demand for food processing ingredients is also projected to increase. Manufacturers of food processing ingredients can benefit from the increased distribution channels in North America, and thus, increase their product reach. Azelis, through its acquisition of Chemroy, has become one of the leading distributors of food processing ingredients in North America and can benefit from the increased demand for processed foods in the region.