Balchem boosted by microencapuslation trend

The New York-based microencapsulation company reported net earnings for the third quarter were $3.2mn, a 4.2 percent increase over the prior year comparable period. Earnings from operations were up 5.3 percent - from $4.7mn in 2005 Q3, to $5.0mn in 2006 Q3.

Microencapsulation has gained in popularity with food companies and is especially useful for the delivery of sensitive nutrients via nutraceuticals and functional foods.

The latest results from Balchem indicate the company has benefited from the opportunities presented by the nutrition industry in particular.

Frost & Sullivan reported last year demand for encapsulation technologies is estimated to be growing at 10 percent, driven both by increasing fortification with health ingredients and consumer demand for novel products.

But at Balchem, sales for the encapsulated/nutritional products segment were $10.3mn for Q3 - up 21.7 percent from the prior year comparable quarter. This includes $1.2mn in sales from its Chelated Minerals Corporation acquisition.

In particular Balchem said that its food, nutritional and human choline products were performing well, with nine percent over the prior year period.

Earnings from operations in the encapsulation/nutrition segment improved 8.7 percent third quarter to third quarter, reaching $1.0mn in the current period.

Microcapsules are tiny particles that contain an active agent or core material surrounded by a shell or coating, and are now increasingly being used in food ingredients preparation.

The technology can be used to deliver a host of ingredients - flavors, oils, peptides, amino acids, enzymes, acidulants, colours and sweeteners - in a range of food formulations. It can also decrease costs for food makers, particularly those using sensitive ingredients such as probiotics.

The company's overall sales for Q3 from all three of its divisions were $25.1m in Q3, up 18.8 percent from the comparable quarter last year which hit $21.1m.