Lanses Completes Acquisition of Emerald Kalama... Strengthening Consumer Protection Business Including Flavors and Preservatives

Expansion of Preservative Portfolio for Fragrances and Perfumes, Food, Household Products, and Cosmetics

[Asia Economy Reporter Hwang Yoon-joo] LANXESS has completed the acquisition of the American specialty chemicals company Emerald Kalama Chemical. Emerald Kalama's corporate value is approximately $1.075 billion (900 million euros), and the acquisition amount is about $1.04 billion (approximately 867 million euros), marking the second-largest acquisition in LANXESS's history.

As of 2020, Emerald Kalama recorded sales of about $425 million and an EBITDA (earnings before interest, taxes, depreciation, and amortization, excluding special items) of around $90 million. Approximately 75% of its sales came from the consumer protection sector, including food preservatives, household and cosmetic preservatives, flavors, and fragrances, while the remaining 25% was generated from the industrial specialty chemicals sector, such as plastics and adhesives.

Particularly, with a leading position in the flavors and fragrances business, LANXESS will emerge as a frontrunner in flavors and fragrances through this acquisition. Approximately 470 employees and production facilities located in Kalama, Washington, USA; Rotterdam, Netherlands; and Widnes, UK, have also been added.

Having risen as a global leading supplier of flavors and fragrances, LANXESS will establish a new Flavors & Fragrance business unit by integrating the newly acquired flavors and fragrances product portfolio with its existing benzyl alcohol product line. Flavors and fragrances products are mainly used to add taste and scent to personal hygiene products, cosmetics, perfumes, and food and beverages, and the market is expected to continue strong growth. Benzyl alcohol products are primarily used as ultra-pure preservatives and synthetic chemicals in injectables and cosmetics and are also applied in flavors and fragrances, pesticides, and more.

With this acquisition, LANXESS will significantly expand its preservative portfolio and strengthen its leading position. Key products have been enhanced, including food and beverage preservatives approved by the U.S. Food and Drug Administration (FDA), as well as preservatives applicable to cosmetics, personal hygiene products, detergents, fabric softeners, and Nordic Swan and Ecolabel-certified household products.

Industrial specialty chemical products for plastics, paints and coatings, adhesives, and more will be incorporated into the existing polymer additives business unit. Major products include phthalate-free plasticizers used in adhesives, coatings, sealants, and vinyl; plasticizers for polysulfide sealant manufacturing; and reactive polyurethane modifiers.

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