Fontarome plans to ‘separate from the pack’

Fontarome Chemical Inc., a St. Francis-based maker of flavoring, fragrance and key pharmaceutical ingredients sold around the world, will soon have another competitive advantage over other chemical makers in the United States.

Fontarome’s flavors and fragrances are found in food products such as Jell-O, Jolly Ranchers candy, several brands of gum and many other household products. Its pharmaceutical ingredients make their way into prescription drugs that treat depression, schizophrenia, anxiety and other psychiatric conditions.

The company recently purchased a 1,200-gallon hydrogenator, which will begin operating by the end of the year, said Carl Sheeley, president of the company. Fontarome currently has a smaller hydrogenator, but the new machine will give it five times its current capacity.

Hydrogenation can help make certain chemicals in an affordable, efficient fashion, he said.

“It’s most economic, when you’re making chemicals with hydrogen, to do it with hydrogenation,” Sheeley said. “And it’s more environmentally friendly. It’s so simple.”

Once the new hydrogenator is installed, Fontarome will have the largest hydrogenation capacity in the United States. The large capacity is part of Sheeley’s branding effort for his company.

“This is a way to separate us from the pack,” he said. “Hydrogenation has been around forever. There aren’t that many places in the U.S. that have a real competitive advantage with it.”

The hydrogenator and skill sets for developing chemicals with it will help Fontarome increase its profile in the chemical industry both nationally and internationally, Sheeley said.

“We’re in the middle of this now – we’ve decided that this technology will be one of our core technologies,” he said. “When people think about Fontarome, we want them to think about hydrogenation.”

Hydrogenation requires a specific skill set within chemistry, Sheeley said, one that takes time for chemists to develop. Fontarome has several chemists with hydrogenation experience, and it expects to hire at least one more with experience in the area.

The company is also creating a relationship with a manufacturer of chemical catalysts, an ingredient needed for the hydrogenation process, to ensure that Fontarome’s chemists know the most current information about hydrogenation.

“We’re evaluating who to partner with, who would help our internal person keep state of the art on catalyst development,” Sheeley said.

Fontarome’s new hydrogenator will soon make itself useful, considering the company’s recently signed multi-year contract to create and supply a complex molecule that will be crucial for flavoring, to be used by the beer industry, Sheeley said.

“We’re also investigating some never-before-seen flavor ingredients for the same industry,” he said. “(The hydrogenator is) quickly becoming a core technology for us. Highly complicated chemicals for the beer industry could be a new niche for us.”

Sheeley recently signed an agreement to purchase three acres of land in St. Francis where Fontarome will expand. Fontarome currently sits on a one-acre parcel.

The purchase has not yet closed, and Sheeley declined to give the location of the property or the sale price because of the pending sale.

The land, which includes an existing building, is needed because of Fontarome’s growth this year, Sheeley said.

“We have four contracts that are worth more than $1 million that are new this year,” he said. “Before 2007, our biggest contract was for like $350,000. Our pharmaceutical business has almost doubled this year, and the flavors side has gone up by double digits.”

The company has also added a significant number of employees this year. In May, the company had 40 to 50 employees, Sheeley said. Today, it has almost 60.

In early 2008, Fontarome will divide itself into two separate companies – its pharmacy division and its flavor and fragrances division.

“Because of the growth of both businesses it makes practical sense to separate them physically and legally,” Sheeley said.

Sheeley will oversee the company’s pharmaceutical division, and Mike McNello, vice president of flavor and fragrance, will run Fontarome’s flavor and fragrance division.

“The manufacturing will stay in (the central) building,” Sheeley said. “But they will have separate warehouses. The companies will share common things like accounting, human resources and a board of directors.”

Fontarome is also now looking for a  warehouse in and near Paris, France, Sheeley said. The company has a French subsidiary, FCI S.A.S., located in Paris, and the warehouse is needed to support the subsidiary.

The 5,000- to 10,000-square-foot warehouse will need to be leased by early 2008, Sheeley said. While the warehouse sounds small, Fontarome’s flavor and fragrance chemicals don’t need much space.

“They’re usually in the one to five kilogram quantity,” Sheeley said. “They’re used in the parts per million quantity. A little bit goes a long way.”

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