The United States Department of Agriculture (USDA) issued an updated forecast for the 2012-2013 citrus crop. The Florida crop is estimated to be 142 million boxes of oranges for the upcoming season. This is approximately an 8% reduction from the original forecast of 154 million boxes in October. This projected number is 3% lower than last season’s final production. Some industry experts are anticipating this forecast number to be reduced further in coming months. Florida is currently harvesting the first season citrus crop. Florida’s first season is projected to end in late February. Brazil has reached the end of their harvest season, and shipments from Brazil are expected to decrease. Raw material costs are increasing, and this updated USDA crop information will undoubtedly increase demand on current citrus supplies.
It also must be noted that cold weather risk can still play a role in the citrus crop. Companies should manage their inventories very carefully. The USDA forecasts have been historically reliable because of their independence from the industry. Estimates have differed from final utilization by less than 5% on average, in non-hurricane affected years. The National Agricultural Statistics Service (a USDA division) updates these numbers monthly.
Florida Chemical Company, Inc. and its subsidiaries, including FC PRO, LLC, has signed a definitive agreement to be acquired by Flotek Industries, Inc., a Houston based oilfield technology and specialty chemistry company listed on the New York Stock Exchange. Under the agreement, Florida Chemical will become a wholly owned subsidiary of Flotek. The Company will continue to operate from its Winter Haven headquarters and remain a leader in citrus oil processing for the oil and gas industry as well as the flavor and fragrance industry.
Florida Chemical and Flotek have enjoyed a long and mutually rewarding relationship. Our companies began working together over 15 years ago in the development of specialty oilfield chemistries. Today, both Florida Chemical and Flotek are leaders in the development of high performance, renewable and sustainable chemistries for the oil and natural gas industry. The combination of our companies creates a world class leader in bio based chemistry innovation for the energy sector while continuing Florida Chemical’s leadership in the flavor and fragrance business.
This is an exciting opportunity for Florida Chemical and all its stakeholders. The combination provides Florida Chemical with access to new sources of capital to continue its successful growth strategy while, at the same time, providing Flotek with additional research capabilities to meet growing demand for its innovation of high performance oilfield chemistries with an environmental focus. In addition, Flotek is firmly committed to continuing the growth and innovation that are hallmarks of our flavor and fragrance operation as well as our other important specialty chemical lines associated with citrus oil processing.
In short, this is an exciting step in our company’s history of developing responsible alternative products for many industries.
While the combination of Florida Chemical and Flotek creates exciting opportunities for both companies, our commitment to you will not change. You will continue to work with the same leadership and team at Florida Chemical that has earned your trust over our 70-plus years of doing business in Central Florida and around the world.
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You get the advantages of the renewable citrus oils lifecycle with our comprehensive, environmentally responsible catalog of citrus oils, fractions, isolates, and formulated products.