HAIFA, Israel, July 2 /PRNewswire/ --

- Adumim Sales for 2006 Reached US$ 5.5 Million

- Adumim Develops, Produces and Markets Ingredients and Unique Fine
Ingredients for the Food, Nutraceuticals and Functional Food Industries

Frutarom Industries Ltd. (LSE: FRUT, TASE: FRUT, OTC: FRUTF.PK)
announced today that on June 28, 2007 its wholly owned subsidiary, Frutarom
Ltd., signed an agreement to acquire the activity of Adumim Food Additives
Ltd. ("Adumim"), a public company listed on the Tel Aviv Stock Exchange,
which was established in 1977 by, among others, Dr. Eli Pintus and Prof.
Nissim Garti. According to the terms of the agreement Frutarom will purchase
Adumim's assets (excluding its real estate and customer, debit and cash
balances) in consideration for US$4,250,000. Adumim's sales for 2006 totaled
approximately US$5.5 million, mostly in Israel.

Adumim has two main fields of activity: development,
production and marketing of ingredients and unique fine ingredients for the
food and functional food industries which provide the final product with
flavor, color, texture, a long shelf life and healthful values; and
development and production of food ingredients containing medicinal plant
extracts, vitamins and minerals known to have positive health benefits and
nutrition products for the elderly (including ill people who have difficulty
consuming solid food.)

Adumim's activity is synergetic and compatible with the
Frutarom Group's operations and will broaden Frutarom's product portfolio and
the natural, healthful solutions which Frutarom offers its customers
worldwide, especially in the fields of food, nutraceuticals and functional
food. The acquisition will also strengthen Frutarom in the natural emulsions
and clean label areas, both of which are characterized by an above average
growth rate. Adumim's products, some of which are patented, will be
integrated into the range of products produced and marketed by both
Frutarom's Flavors and Fine Ingredient divisions. Frutarom intends to utilize
the cross selling opportunities created from this acquisition and to sell
Adumim products to its existing customers, located in 120 countries, via its
45 marketing and sales offices, thus maximizing the synergy between the
companies' operations. The cross selling will also include Adumim's customers
located outside Israel, to whom Adumim sells unique products, some of which
are patented.

Adumim holds 45.8% of the share capital in NutraLease Ltd.
("NutraLease") which was established at the initiative of Prof. Nissim Garti
of The Hebrew University of Jerusalem's Casali Institute of Applied Chemistry
and one of the founders of Adumim. NeutraLease has developed new and unique
nano-encapsulation technology that enables a unique delivery system through
which insoluble materials may be added to foods, beverages, medications and
cosmetic products without adversely affecting their quality. The patented
technology helps to enhance the solubility of active ingredients, to increase
their bio-availability and to control the release of active ingredients,
including flavors and medications. The technology also helps with the
introduction of insoluble materials into clear beverages, which is currently
a rapidly growing field. Adumim has exclusive production and marketing rights
for products based on the unique technology developed by NutraLease for the
food industry. Frutarom intends to develop this activity and to bring this
unique technology to its customers around the world.

Adumim abounds with research, development and innovation, led
by Dr. Eli Pintus and Prof. Nissim Garti, each of whom has accrued decades of
applied research experience. The integration of Adumim's operations with
those of Frutarom will strengthen the Frutarom Group's research and
development infrastructure, which will benefit from the addition of high
quality personnel in the fields of development of fine ingredients and unique
technology.

According to Ori Yehudai, President and Chief Executive
Officer of the Frutarom Group, "The acquisition of Adumim, the fourth
acquisition Frutarom has made this year, constitutes the continued
implementation of our rapid growth strategy while strengthening the Taste and
Health area as per Frutarom's vision: "To be the Preferred Partner for Tasty
and Healthy Success." Frutarom intends to realize and utilize the great
commercial and operational synergy that exists between Frutarom's operations
and those of Adumim in order to take maximum advantage of the cross selling
possibilities while achieving maximum cost savings." Yehudai added that,
"thanks to Frutarom's proven experience in acquisitions and synergy
realization, we are certain that this acquisition will also contribute to the
continuing rapid and profitable growth of Frutarom and that it will create
high value for our customers, our employees and our shareholders."

Completion of the acquisition is subject, among others, to the
approval of the Israeli Anti Trust Commissioner.

Yehudai concluded that, Frutarom continues to implement its
rapid growth strategy, which combines organic growth in core activities, at
rates higher than the average for the industry in which Frutarom operates,
with strategic acquisitions. Frutarom continues acting to locate and complete
additional strategic acquisitions of activities and knowhow in Frutarom's
fields of activity.

About Frutarom:

Frutarom is a multinational company operating in the global
flavor extracts and fine ingredients markets. Frutarom has significant
manufacturing and development centers on three continents and markets its
products to more than 5,000 customers in over 120 countries on 5 continents.
Frutarom's products are intended for the food and beverage, flavor and
fragrance, pharmaceutical, nutraceutical, health food, functional food, food
supplement and cosmetic industries.

Frutarom operates two main divisions:

- The Flavors Division develops, manufactures and markets
flavor compounds and food systems.

- The Fine Ingredients Division develops, manufactures and markets
natural flavor extracts, natural functional food ingredients, natural
pharma/nutraceutical extracts, essential oils and unique citrus products
and aromatic chemicals.

Frutarom's products are produced at its facilities in the US,
the UK, Switzerland, Germany, Israel, Denmark, China, and Turkey. The
company's global marketing network includes marketing departments in Israel,
the US, the UK, Switzerland, Germany, Belgium, Holland, Denmark, France,
Hungary, Romania, Russia, the Ukraine, Kazakhstan, Belarus, Turkey, Brazil,
Mexico, China, Japan, Hong Kong, India, and Indonesia. The Company also has
agents and local distributors throughout the world. Frutarom employs 1,200
employees worldwide.

Company Contact
    
    Ori Yehudai, President & CEO
    Frutarom Ltd.
    Tel: +972-4-846-2401
    E-mail: oyehudai@frutarom.com