International Flavors & Fragrances Inc. (IFF) recently announced its plans to invest over $100 million in two new state-of-the-art manufacturing facilities in Greater Asia over the next three years. The facilities will be located in Guangzhou, China and Singapore.
The company, a leading creator and manufacturer of flavors and fragrances meant for consumer products, will primarily use the Guangzhou facility for flavors production while the Singapore facility will be used for both flavor and fragrance production. The flavor business accounts for approximately 45% of the company's total revenue while fragrances account for the remaining 55%.
The investment is viewed as a strategic step by the company to tap the growing market in these emerging economies. Moreover, the new facilities are located at favorable distances from the existing International Flavors & Fragrances' facilities, ensuring smooth transition and effective operations.
With the economy reviving from the global crisis, consumer spending is seen to be accelerating, a positive driver for the flavors and fragrances industry. We believe International Flavors & Fragrances stands in a favorable position to benefit from new business wins, tremendous geographical diversification and product mix.
Furthermore, the company's continuous accomplishments in research and intense consumer insight support its growth momentum. Moreover, the company's efforts to reduce operating costs will enhance top line and margin levels in the quarters ahead.
Currently, the Zacks Consensus Estimate for fiscal year 2010 stands at $3.42 per share, reflecting an increase of 26.84%. Estimates for the fiscal year 2011 is $3.78 per share, up 10.44% year over year.
Anticipating outperformance relative to the market, we currently maintain an Outperform recommendation on the stock.
INTL F & F (IFF): Free Stock Analysis Report
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