The new facility will replace the present site in Singapore and together with Danisco's Chinese flavour plant the company says it will provide a strong foundation for servicing the Asia Pacific region.
According to a Danisco spokesperson the Penang facility will serve the south-east Asian market, concentrating on Thailand, Malaysia and Indonesia, while the company's China operations, including its dedicated flavours manufacturing facility in Kunshan, will continue to concentrate on serving the China market.
"With the rapid growth we've had in the Asia Pacific region and increasing sourcing of local raw materials, there's a need for a strong manufacturing presence to service our customers and to strengthen and expand our market position," said Mac Mardi, vice president of Danisco Flavours.
However, it has been agreed that the China and Penange plants will be collaborating on, among other things, raw material sourcing.
The construction of the new $3 million (€2.3m) production unit will be initiated immediately and is expected to be completed in mid-2005. Besides doubling the current capacity, the new facility is scheduled for an annual two-digit capacity expansion for the next few years.
A flavour market set to become a significant growth engine for Danisco, Asia Pacific already totals approximately $1.4 billion, with an annual growth rate of 5 per cent.
In recent years it has been the emerging markets, and in particular the Asia Pacific region, that has helped boost the company's results. Stagnant sales in both the US and Europe have been counterbalanced by particularly strong results in the rapidly growing China market.
Danisco's flavour's division only set up its headquarter for the region in Singapore at the end of 2002. But since then, continuous growth has made it a core focus of the group's international activities.