Balchem Corporation engages in the development, manufacture and marketing of specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, medical sterilization and industrial markets. The company sells its products through its own sales force, independent distributors and sales agents. The company operates four wholly-owned domestic subsidiaries, such as SensoryEffects, Inc.; SensoryEffects Cereal Systems, Inc.; BCP Ingredients, Inc.; and Aberco, Inc. The company operates two wholly-owned subsidiaries in Europe, such as Balchem BV and Balchem Italia Srl. The company also operates one wholly-owned subsidiary in Canada, Balchem LTD. Segments The company operates through four segments: SensoryEffects; Animal Nutrition & Health; Specialty Products; and Industrial Products. SensoryEffects This segment supplies ingredients in the food and beverage industry; providing customized solutions in powder, solid and liquid flavor delivery systems, spray dried emulsified powder systems, and cereal systems. The company’s products include creamer systems, dairy replacers, powdered fats, nutritional beverage bases, beverages, juice and dairy bases, chocolate systems, ice cream bases and variegates, ready-to-eat cereals, grain based snacks, and cereal based ingredients. Additionally, the company provides microencapsulation solutions to various applications in food, pharmaceutical and nutritional ingredients to improve performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life. Major product applications are baked goods, refrigerated and frozen dough systems, processed meats, seasoning blends, confections, and nutritional supplements. The company also produces and markets human grade choline nutrient products through this segment for wellness applications. Animal Nutrition & Health This segment provides nutritional products derived from the company’s microencapsulation and chelation technologies in addition to basic choline chloride. For ruminant animals, the company’s microencapsulated products boost health and milk production, delivering nutrient supplements that are biologically available, providing required nutritional levels. The company’s proprietary chelation technology provides improved nutrient absorption for various species of production and companion animals, and is marketed for use in animal feed throughout the world. This segment also manufactures and supplies choline chloride, an essential nutrient for monogastric animal health, primarily to the poultry, pet and swine industries. Specialty Products This segment operates commercially as ARC Specialty Products. Ethylene oxide, at the 100% level, is sold as a sterilant gas, primarily for use in the health care industry. It is used to sterilize a range of medical devices because of its effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics without negatively impacting the performance of the device being sterilized. The company’s 100% ethylene oxide product is distributed in designed, recyclable, double-walled, stainless steel drums to assure compliance with safety, quality and environmental standards as outlined by the U.S. Environmental Protection Agency and the DOT. Contract sterilizers and medical device manufacturers are principal customers for this product. The company also sells single use canisters with 100% ethylene oxide for use in sterilizing re-usable devices typically processed in autoclave units in hospitals. Propylene oxide is marketed and sold as a fumigant to aid in the control of insects and microbiological spoilage; and to reduce bacterial and mold contamination in certain shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs and prunes. The company distributes its propylene oxide product primarily in recyclable, single-walled, carbon steel cylinders according to standards outlined by the U.S. Environmental Protection Agency and the DOT. Propylene oxide is also sold to customers seeking smaller (as opposed to bulk) quantities and whose requirements include utilization in various chemical synthesis applications, such as increasing paint durability and manufacturing specialty starches and textile coatings. Industrial Products This segment includes certain derivatives of choline chloride that are manufactured and sold into industrial applications primarily as a component for hydraulic fracturing of shale natural gas wells. The company’s products offer an alternative than other clay stabilizers. This segment also includes the manufacture and sale of methylamines. Methylamines are a primary building block for the manufacture of choline products and are produced at the company’s Italian operation and sold for a range of industrial applications in Europe. Acquisitions In February 2016, the company acquired 100 percent of Albion International, Inc., a privately held manufacturer of mineral amino acid chelates, specialized mineral salts, and mineral complexes. Intellectual Property The company holds 16 patents in the United States and internationally, and uses certain trade-names and trademarks. The company’s U.S. patents expire between 2016 and 2024. Research and Development During the year ended December 31, 2015, the company incurred research and development expenses of approximately $6.0 million on company-sponsored research and development for new products and improvements to existing products and manufacturing processes. Environmental/Regulatory Matters The Federal Insecticide, Fungicide and Rodenticide Act, a health and safety statute, requires that certain products within the company’s Specialty Products segment must be registered with the U.S. Environmental Protection Agency because they are considered pesticides. The company holds the U.S. Environmental Protection Agency registrations permitting the company to sell ethylene oxide as a medical device sterilant and spice fumigant, and propylene oxide as a fumigant of nuts and spices. History Balchem Corporation was founded in 1967. The company was incorporated in the state of Maryland in 1967.
(BCPC:Consolidated Issue Listed on NASDAQ Global Select )
52 Sunrise Park Road
New Hampton, NY 10958
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