IFF Opens Facility in Singapore

New York-based, International Flavors & Fragrances Inc. (IFF - Analyst Report) with an aim to further strengthen its footholds in Greater Asia, announced opening of a new facility in Jurong, Singapore.

This 12,000 square meter, state-of-the-art facility will be replacing the company’s existing facilities in the region. Production capacity is anticipated to be around 20,000 metric tons over time.

The facility is part of the company’s $100 million investment plan in Greater Asia. The facility will be producing liquid flavors and fragrances for its large customer base in the region. The facility is environment friendly and has been designed to have minimal solid waste.

We believe that reviving global economy and better consumer spending is a positive driver for the flavors and fragrances industry. New business wins, substantial geographical diversifications, wide product lines, continuous accomplishments in research and intense consumer insight will act as growth drivers for IFF. Over the long term, the company targets to achieve a 4%-6% increase in local currency sales, about 7%-9% operating profit growth and over 10% earnings per share growth.

Also, capital spending over the years is expected to concentrate more on seizing opportunities in the emerging markets. Besides, bolt-on acquisitions will be given preferences to gain access to desirable customers, regions, or technologies.

The current Zacks Consensus Estimate for the third quarter of 2012 is $1.07, reflecting a year-over-year growth of 7.0%. Estimates for 2012 and 2013 are $3.99 and $4.32, representing annual growth of 6.6% and 8.3%, respectively.

We currently maintain a Neutral recommendation on International Flavors & Fragrances. The stock also bears a Zacks #3 Rank, implying a long-term Hold rating.