Marine Ingredients filling in vertical integration pieces with purchase of softgel facility

By Hank Schultz contact

- Last updated on GMT

Marine Ingredients' Florida softgel facility joins other fairly recently acquired facilities such as this one Brattvåg, Norway. The company also has a new plant in Dutch Harbor, Alaska.
Marine Ingredients' Florida softgel facility joins other fairly recently acquired facilities such as this one Brattvåg, Norway. The company also has a new plant in Dutch Harbor, Alaska.

Related tags: Strategic management

Marine Ingredients continues to build out its capabilities along the omega-3 value chain with its recent acquisition of a Florida-based softgel manufacturer.

Marine Ingredients, based in Mt Bethel, PA, has wrestled with how to bring the best quality ingredients to market from its inception, said executive vice president Bruce Miller. The company found early on that with a potentially volatile ingredient such as fish oil, a fragmented supply chain proved to be a major complication.

“Our main focus has always been omega-3 ingredients. Our business model was fully put into place sometime in the mid to late ’80s. The biggest challenge was to deliver a quality product. We moved into softgels pretty quickly, because we found that even the best quality oil would suffer if the attention to detail at the softgel stage with nitrogen baths and so forth wasn’t there,” ​Miller told NutraIngredients-USA.

“We decided we were going to get out of the bulk oil business take our oil directly into softgels for our customers,”​ he said.

For a number of years Marine Ingredients has had a relationship with a manufacturer in Southern California to put out omega-3 softgels that meet the company’s quality standards. That agreement was running up against the manufacturer’s limits, and to continue to grow Marine Ingredients needed more capacity, Miller said.

In the recently announced deal Marine Ingredients has agreed to buy from Aenova Group the manufacturing facility that has been operating under the Swiss Caps banner. As part of the agreement, the ​employees currently working in Miami will transfer from Swiss Caps USA to Innova Softgel, LLC, a newly formed subsidiary of Marine Ingredients. Both parties agreed not to disclose financial details of the transaction, which is expected to be closed by the end of this month.

Continued acquisitions

The deal joins other recent developments which have seen Marine Ingredients open a joint venture extraction facility in Dutch Harbor, AK, located in the Aleutian Islands. The company extracts oil from Arctic cod harvested in an MSC-certified fishery at that facility. That deal followed on the heels of Marine Ingredients’ purchase of an omega-3s extraction facility in Brattvåg, Norway, which the company bought from BASF.

Becoming more vertically integrated is not just good for cost savings and quality, it is also potentially reassuring to customers in era of complex global supply chains.

“A lot of consumers have said that they don’t want a supplement from China, but a recent survey conducted by the United Natural Products Alliance showed that many of them are unaware that a lot of the ingredients in supplements come from China.  A lot of fish oil comes out of China.  In this uncertainty in the supply world it’s an advantage to be able to say where the oil comes from,”​ Miller said.

Related topics: Manufacturers, M&A

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