Huber buys number one xanthan gum and pectin slot

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Family-owned US firm JM Huber has become the number one pectin,
xanthan gum and CMC supplier after yesterday agreeing to buy
leading hydrocolloid firm CP Kelco from merchant bank Lehman
Brothers, reports Lindsey Partos.

Terms of the deal were not disclosed, but industry observers pitched the acquisition, which takes the New Jersey-based company deeper into additives and thickeners, in the region of $1 billion (€0.8bn).

"JM Huber are more or less in commodity chemicals, this latest move takes them further into speciality chemicals to up returns,"​ Dennis Seisun at IMR International​, set to host the annual hydrocolloid industry meeting in Budapest, Hungary next April, commented to​.

Ending weeks of industry speculation as to the prospective buyer, the purchase builds on the 28.57 per cent chunk of CP Kelco that Huber bought from US chemicals firm Hercules in January this year, buying straight into the current 'darling' of the hydrocolloids world - pectin - and the competitive market of xanthan gum.

Other ingredients firms thought to have been competing for the Lehman slice were top tier global suppliers of xanthan, pectin and carrageenan including FMC Corporation and acquisitive Irish firm Kerry Group. Xanthan supplier Danisco recently told shareholders that it would not make a pitch for CP Kelco, likely linked to its already strong position in the xanthan market and anti-trust concerns.

The Danish firm recently extended its xanthan gum position in the emerging Chinese market, linking up with one of the largest suppliers there, the Henan Tianguan group. In addition, Danisco has just bought Rhodia food ingredients, which also held a slice of the xanthan gum market.

CP Kelco was formed in September 2000 from Hercules' Food Gums division and the Kelco Biopolymers division of Monsanto Pharmacia. Contrary to today's news, industry spectators in the past had anticipated that Hercules would in time opt to take full control of CP Kelco.

JM Huber is a newcomer to the food additives industry, only entering the world of stabilisers and suspending agents in January 2001 with the purchase of Finnish company Noviant, the world's biggest producer of carboxymethylcellulose (CMC) with a 30 per cent slice of the world market. CMC is used extensively in food formulations such as dressings, ice cream, baked goods, puddings and sauces to stabilise, thicken and bind.

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