Olam Food Ingredients (OFI) has agreed to acquire Mizkan America’s chilli pepper business (CPB) for $108m to meet the demand for Mexican flavours.

based in Deming, New Mexico, CPB is engaged in the supply of premium green chillies, jalapeños and enchilada sauces.

The deal has been made by Olam subsidiary Olam Americas and is said to be first for OFI since its creation earlier this year.

A part of OFI, Olam Spices supplies dried garlic, onion and chilli-based ingredients.

As one of the largest organic chilli grower and processor in the US, Olam Spices operates a manufacturing facility in Las Cruces, New Mexico.

Olam Spices CEO Greg Estep said: “We are further pleased that in operating CPB, Mizkan shares the same focus on sustainable agriculture and quality control, maintaining close farmer relationships and fully integrated supply chains.

“This also allows Olam Spices to strengthen and expand our chilli sourcing network — notably in Hatch Valley, New Mexico. With the CPB senior executive leadership at the helm, supported by an outstanding group of employees committed to excellence, we will continue to grow the business even further.”

OFI said that CPB’s facility in Deming is located at less than 60 miles from Olam Spices’ red chilli manufacturing facility.

The company anticipates that the close proximity between the two manufacturing facilities will also improve manufacturing and product development.

OFI CEO A Shekhar said: “This is a fitting first acquisition for OFI, as CPB fulfils OFI’s vision to help its customers meet consumer preferences for health, nutrition, natural and authentic ethnic flavours, as well as their increasing demands for understanding the provenance and environmental impact of their food choices.

“The addition of CPB’s range of premium green chillis will also broaden and strengthen OFI’s portfolio in plant-based solutions, which continue to gain popularity among consumers. For example, by working with OFI’s innovation team, we can produce a nut-based cheese that has a jalapeño flavour kick.”

Completion of the deal is subject to US anti-trust regulatory approval and customary closing conditions and expected to be complete in January 2021.