Innophos takes sales hit as it exits low margin nutrition trading business

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In its most recent earnings statement the company, which is based in Cranbury, NJ, said its second quarter 2018 sales had declined by more than 10% year over year, coming in at $185 million. Nevertheless, the company’s aggressive cost cutting and restructuring meant that EBITDA had actually risen in the same time frame.

Ongoing transition

Innophos, until recently, was primarily known as a supplier of speciality industrial phosphates as well as phosphate ingredients used in nutritional applications.  Starting in 2015 with the appointment of Kim Ann Mink, PhD as CEO the company embarked on a program of diversifying the company away from markets that were highly commoditized and which offered little opportunity for innovation.

Mink inaugurated a program for the company she called Vision 2020.  Under the program she led the acquisition of Novel Ingredients and Nutragenesis in 2017. The company spent a combined $143 million on the acquisitions.

Part of those acquisitions included what Innophos characterized as a “low margin nutrition trading”​ business, which the company exited in the second quarter of its fiscal 2019. Mink said the company is pursuing higher margin value added activities, such as the launch of a new vitamin D3 processed with dicalcium phosphate for longer shelf life, or a fruit and vegetable powder blend for an immune health beverage offered in powdered form.  Mink also said Innophos is supplying a “new calcium complete vitamin formulation with magnesium for one of our global customers growing business in Asia.”

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