“Through the operation of a new finished goods warehouse, we will also create 21 new jobs”

End Quote Rik Jacobs Tetra Pak

The modernisation programme, which has just been finished, includes production areas, staff facilities and new equipment to improve efficiencies at the firm’s Sevenoaks, UK base.

As a leading supplier into the UK chilled ready meal, soup and sauce market, Jardox provides wet stocks, pastes and dry ingredient blends, and provides own-label ingredients for the likes of Tesco and Asda, as well as leading food manufacturers such as Kerry Group, Greencore and Premier Foods.

Steady turnover growth

Alex Gardener, md, told FoodNavigator.com that the investment over the last 12 months included new retail lines with fillers, wrap and capping machines. This has increased Jardox’s capacity on jars alone by 30%, he said, adding that it was difficult to estimate current output due to the viscosity of many products.

The firm mainly supplies UK customers, although it has a small customer base in Europe, and Gardener said Jardox is currently growing at around 15% per year. Turnover currently stands at £12m, and the firm plans to grow this to £14m in the short-term, perhaps by the end of 2012.

Flavouring regulation impact

Although the EU flavour ing regulation 1334/2008 was adopted at the end of 2008, one major change active from January 20 2011 concerning suppliers, of ingredients, food manufacturers and retailers includes more detailed labelling requirements for natural flavours, with reclassification of nature identical and artificial flavours as ‘flavouring substances’ on labels and documentation.

Asked if this change had affected Jardox’s business significantly, Gardener said: “Slightly, but we’ve had time to prepare for it and since we mostly deal in natural and allergy-free products, so there hasn’t been as much impact on us as some of the flavour houses.”

Meal kit trend

As for current retail trends affecting ingredient supply, there is a significant increase in demand for own-label ‘cooking aids’, said Gardener, emphasising that such products add value to home cooking.

“People are buying ready meals, but are also keen on buying ready meal kits and cooking dinner from themselves – we see real potential for growth here,” he said.

“You can take this into traditional British cuisine as well, where consumers waste so much when they home cook at home with herbs and spices: this isn’t the case if you have a meal for four with sensible portion control. You simply have the herbs and spices supplied for one meal.”

Kamal Nath: “Fuel subsidies could hinder growth”

The German chemical giant said its Epotal Eco adhesive is the first compostable water-based adhesive to be certified by the DIN Certco, a certification company of the TÜV.

This means that the product is certified as a biodegradable additive under the definition given by the European EN 13432 standard. The regulation states that substances are considered as fully biodegradable if at least 90 per cent of the organic carbon in them is converted to CO2 in no more than 180 days.

BASF said Epotal Eco achieved this milestone after only 70 days. With the help of enzymes, microorganisms are able to break down the adhesive into carbon dioxide, water and biomass, leaving no toxic residuals.

The Epotal Eco product is designed for use in the production of multilayer films for flexible packaging materials based on biodegradable plastics. BASF said possible applications include bags for potato chips or chocolate bar wrappings.

The company expects the product and others like it to take an increasingly important position in the packaging market as the industry moves in the biodegradable direction

“Biologically degradable adhesives will play a decisive role in the future when it comes to developing compostable packaging materials,” said Cornelis Beyers, from the BASF marketing team.

BASF spokesperson Agata Koziuk said the market for biologically degradable adhesives is not just a future one. She said: “BASF as well as DIN Certco regularly receive requests for biodegradable materials. From this we must assume that there is a strong market interest.”

The acquisition will create a $9bn a year company with a total production capacity of seven million tons. That makes a combined company that is the second biggest North American containerboard producer and the number two global supplier of coated recycled board.

Deal details

Under the terms of the deal, RockTenn is offering 50 per cent cash and 50 per cent stock for the larger Smurfit. Once the transaction is completed, RockTenn shareholders will own 56 per cent of the combined company and Smurfit shareholders will own the remaining 44 per cent.

In addition to the equity consideration, RockTenn has agreed to assume Smurfit’s net debt and pension liabilities, which add up to $1.8bn.

Smurfit has reduced its debt burden by almost $3bn over the last couple of years as the company fought its way out of bankruptcy.

Return from bankruptcy

It finally emerged from Chapter 11 bankruptcy in June last year after 17 months of proceedings that returned the company to profitability.

The company had initially run into difficulties at the end of 2008 when demand plummeted as a result of the financial crisis.

After filing for bankruptcy, Smurfit began to restructure its operations, cutting jobs and closing facilities, including a mill in Missoula employing 417 people, in an effort to reduce its debt and solve over-capacity problems.

In fourth quarter results published yesterday, Smurfit announced adjusted net income of $62m, compared to an adjusted net loss of $16m in the equivalent period last year.

RockTenn will be banking that the economy continues to improve, resulting in higher demand for food and consumer goods shipped in cardboard containers.

The transaction, which is subject to approval from shareholders and regulators, is expected to close in the second quarter of 2011.

The Food Standards Agency (FSA) said at its board meeting this week it is to undertake a far-reaching rethink on the system for charging for inspections at food business operations (FBO). Its recommendations are scheduled to be considered by the body as early as this summer.

Agency chiefs made the decision to launch the review after considering a report that said the current charging arrangements are inconsistently applied across sectors and there is no strong link between the fees paid and compliance with food safety legislation. It added the present system actually discourages greater responsibility by FBO for delivery of official controls.

Cost recovery and centralisation

The food watchdog’s chair, Jeff Rooker, said the reassessment would seek to modernise the UK’s current system.

“The UK food sector is one of the most sophisticated and developed in the world,” he said. “The current official control delivery arrangements do not mirror the modern food supply chain with food businesses ranging from multinationals and global brands to single artisan producers operating across local authority boundaries.”

But the report also fully acknowledged that a “key principle” of the review was to make the inspection regime cost effective, the FSA aiming for full recovery of its costs.

Rooker echoed this yesterday when he said: “The heart of the FSA’s role is protecting public health from risks, which may arise in eating food, including the way it is produced or supplied. In the current climate of financial pressures it is timely to consider how best we can secure consistency and sustainability in this fundamental public health protection function.”

In effect, this is likely to result in an extension of the number of FBOs subject to inspection charges. Under the current regime, fee for official inspections apply at slaughterhouses, meat cutting sites and fish processing plants – but not at registered food and feed establishments, nor dairy processors or fish cutting facilities.

The FSA has anticipated that any changes to the fees system could trigger industry opposition but said changing the present system could result in a failure to improve food safety and compliance by businesses. It would also run the risk of not being able to influence EU policy, which is currently being re-examined.

Objective

Rook pledged the review would be “objective with no pre-determined outcome”. It would look at a range of options, including a more centralised model with one body in England, Scotland, Wales and Northern Ireland responsible for carrying out scrutiny of FBOs in their countries.
”The review will be undertaken by FSA staff but overseen by an independent representative. It will be done in partnership and seek the co-operation and involvement of other public health organisations, individuals, other Government departments, professional bodies and consumers across the UK,” explained the FSA chair.

The agency board to scheduled to consider the progress of the review and any proposals for action at its July 2011 meeting.

Raphael Wermuth external communications manager at Barry Callebaut told ConfectioneryNews.com that the company’s two factories in Abidjan and San Pedro are still running. “For the time being our stock levels are sufficient,” he said “they can cover our current needs.”

Wermuth said the company was observing the situation in the Ivory Coast on a daily basis.

US ingredients supplier Cargill, which normally buys around 15 per cent of Ivory Coast’s crop, has reportedly halted its cocoa purchases from the region temporarily.

Rise in prices

Cocoa prices rose 6.2 per cent to $3,393 Monday morning, almost their highest since January 2010, as Alassane Ouattara, the president-elect of the world’s largest producer of cocoa beans, called a halt to all exports including cocoa and coffee for a month.

The move by Ouattara is an attempt to cut off funding from his rival Gbagbo who is currently refusing to leave office despite Ouattara being widely accepted as Ivory Coast’s legitimate leader.

In December, Rabobank warned that cocoa prices would respond if there was a return to civil war in the African producer company.

Cocoa prices to ease

But, according to recent reports, cocoa prices are to ease as dealers say the majority of the region’s main crop has been exported.

Gary Mead, an analyst at VM Group in London said it was toward the end of the main crop, and the majority of the beans have already been registered for export, Bloomberg reported.

“If the ban persists, then we will have a problem,” he said.

Ivory Coast said it will permit exports of beans that have been registered for shipment, say reports.

The European Cocoa Association (ECA) and the Federation of Cocoa Commerce (FCC) raised concerns last week that the ports of Abidjan and San Pedro together with the Coffee-Cocoa Sector Management Committee (CGFCC) have been included within the organisations on the EU sanctions list.

The ECA and FCC asked the Commission to clarify how cocoa shipments can be put through without the standard export tax-based payments to these bodies.

The request was part of a joint communiqué that was sent by the ECA and FCC to the Commission requesting more information about the regulation in order to gain greater understanding of how the sanctions would impact the cocoa supply chain.

Trade bodies press EU on Ivory Coast ban

Lack of clarity on the implications for the cocoa industry of the financial penalties imposed by the EU on the Ivory Coast has prompted trade representatives in the bloc to seek such additional information from the Commission.

The EU has tightened its economic sanctions against the West African cocoa producing country in a move to try and unseat Gbagbo.

EU Council Regulation 25/2011, which entered into force on 15 January 2011, is targeted at individuals and organisations in the Ivory Coast said to be jeopardising the proper outcome of the electoral process.

Thomas Burke, a spokesperson for Food and Drink Industry Ireland (FDII), told ConfectioneryNews.com that the industry group was not aware of any production lines that have been shut down as a result of the EU sugar shortage.

“However, our member companies are finding it increasingly difficult to source sugar on markets and if the current situation persists it will inevitably lead to major production difficulties in the not too distant future,” he stressed.

World market sugar prices reached a 30-year high in November and 2011 will be the third year that global production/consumption has been in deficit, said the FDII, with the trade group adding that the tightness in supply has been exacerbated by recent indications from the EU that it would be issuing 350,000 tonnes of export licences for sugar.

“This means that a large quantity of sugar will exit the EU, which is particularly unhelpful at a time when sugar supplies are scarce,” said FDII director Paul Kelly.

Echoing comments from the European trade body CIUS on the issue, Kelly called for this sugar not to be exported and urged the Irish government delegate to persuade the EC sugar management committee of the seriousness of the issue during today’s deliberations in Brussels.

“Most of the sugar consumed in Ireland is produced in the EU, which still operates import tariffs. While EU sugar refiners have covered 90 per cent of their requirement, high prices and availability problems now mean there is a shortage of supply.

In Europe as a whole, there is not enough sugar to cover existing supply contracts,” added Kelly, who criticised the sugar management committee for postponing a decision on the export licences on two occasions in recent months.

“This uncertainty is not helping the situation,” stressed the FDII director.

Burke told this publication that the measures outlined by CIUS at the end of last year would help to alleviate the current difficulties in the market and would assist its members in providing security of supply of a very important ingredient.

In November, the CIUS urged the Commission to make a negative withdrawal to keep the 350,000 tonnes of out-of-quota sugar within the bloc and also to consider further steps to ensure that market balances are maintained, such as a temporary tariff rate quota on world market imports.

Kelly added that end-manufacturers are facing ongoing anxiety in regard to maintaining production levels due to the fact that basic foodstuff commodities are subject to speculation and supply constraints: “Volatility is here to stay and problems are unlikely to ease until at least next year’s harvest, especially as traders remain attracted to foodstuff commodities.”