Israeli flavours and natural speciality fine ingredients company Frutarom has agreed to purchase a 60% stake in Vietnam-based Western Flavours Fragrances Production (WFF) for nearly $1.3m.

According to the deal, Frutarom will also have the option to purchase the remaining stake in WFF, which will begin four years from completion of the transaction. The price will depend upon the performance of WFF during this period.

The deal is reported to have been financed through independent means and expected to be closed within the next few weeks.

Established in 2003, WFF has been engaged in development and production of flavours for dairy, beverages, confectionery and baked goods segments.

“The acquisition will contribute to strengthening our position in Vietnam.”

With a workforce of 44 employees, WFF offers a wide range of products to its customers in Vietnam.

WFF owns a plant and laboratory in Ho Chi Minh City, as well as a sales and marketing office in Hanoi.

It is reported to be one of few companies in Vietnam to own a research and development laboratory, along with a production site.

Frutarom also intends to build a new flavours plant in Ho Chi Minh City, which will allow them to expand its activities in the Vietnamese market.

WFF director Phuong Nguyen will continue managing the company’s activities.

Frutarom also noted that the acquisition is part of its strategy to expand its footprint in the Asian market.

Frutarom president and CEO Ori Yehudai said: "The acquisition of the Vietnamese flavours company WFF is the continuation of Frutarom’s implementation of its rapid and profitable growth strategy and fulfilment of its vision ‘to be the preferred partner for tasty and healthy success'.

“The acquisition will contribute to strengthening our position in Vietnam with the attaining of a significant relative advantage of having a local R&D, sales production presence in one of South-East Asia’s important growing markets.”

Yehudai further explained that they intend to combine the broad supply of Frutarom’s product portfolio in the growing Vietnamese market while exploiting the many cross-selling opportunities in the country.