HAIFA, Israel, July 4 /PRNewswire/ --

- Continues Implementing its Rapid Growth Strategy

- Abaco Sales for 2006 Reached US$3.2 Million

- Abaco Develops, Produces and Markets Unique Ingredients for the Flavor 
and Fragrance Industry

Frutarom Industries Ltd. (LSE: FRUT; TASE: FRUT; OTC: FRUTF.PK)
announced today that on July 3, 2007, its wholly owned subsidiary, Frutarom
U.S.A. Inc., signed an agreement to acquire 100% of the ownership of Abaco
(Abaco Manufacturing, LLC and Abaco Incorporated) ("Abaco"), a privately
owned American company located in Georgia, in consideration for US$4 million
(and assumption of the company's debt of US$1.1 million). Abaco's sales in 
2006 totaled approximately US$3.2 million.

Abaco develops, produces and markets unique ingredients for
the flavor and fragrance industry and has synergetic activities with those of
Frutarom's Fine Ingredients Division, whose main development laboratories and
production facilities are located in the U.S., the U.K. and Israel. The
acquisition is expected to enhance Frutarom's activities in the U.S., which
is a strategic market for the Frutarom Group, and to expand the product line
offered by the Fine Ingredients Division to its customers in the U.S.A. and
globally. Abaco has hundreds of customers, both multinational and local, with
whom it enjoys long term relationships. Frutarom intends to utilize the
multiple cross selling opportunities arising from the acquisition and to
offer Frutarom's products to Abaco's many customers in the U.S.A. and
throughout the world, as well as offering Abaco's products to Frutarom's
existing customer base. The acquisition will strengthen Frutarom's
capabilities and expertise in the field of unique ingredients for the flavor
and fragrance industry and improve the service and quality that Frutarom
provides to its customers, particularly in the U.S.A.

Abaco was founded in 1989 and its principals have decades of
accumulated knowledge and experience in the field of ingredients for the
flavor and fragrance industry. With the merging of the two companies'
activities, Frutarom will benefit from the addition of excellent, high
quality employees, especially in the realm of development, marketing and
sales. Abaco's management will be integrated with that of Frutarom U.S.A.,
contributing its experience and network.

According to Ori Yehudai, President and Chief Executive
Officer of the Frutarom Group, "The acquisition of Abaco, the fifth
acquisition Frutarom has made this year, demonstrates the continued
implementation of the rapid growth strategy of the Frutarom Group, which is
already one of the ten largest companies in the world in the flavor and
fragrance field. The acquisition supports Frutarom's continued strengthening
and positioning, especially in the American market, which is an extremely
important goal for us. Frutarom will immediately integrate Abaco's activities
with that of Frutarom U.S.A. while realizing and utilizing the extensive
commercial and operational synergy that exists between Frutarom's and Abaco's
operations in order to take maximum advantage of the cross selling
possibilities while achieving maximum cost savings." Yehudai added, "Thanks
to Frutarom's proven experience in acquisitions and synergy realization, we
are certain that this acquisition will also contribute to Frutarom's
continued rapid and profitable growth and that it will create high value for
our customers, our employees and our investors."

According to Yehudai, Frutarom continues to implement its
rapid growth strategy. which integrates organic growth in core activities at
rates above those of the industry, with strategic acquisitions. Frutarom
continues working to identify and implement additional strategic acquisitions
of companies and operations within its fields of operation.

About Frutarom

Established in 1933, the Frutarom Group is a rapidly growing
global flavor and fine ingredients company. Frutarom develops, manufactures
and markets an extensive variety of high quality flavors and natural fine
ingredients for customers in the food, beverage, flavor, fragrance,
pharmaceutical, nutraceutical, food additive, and cosmetic industries.
Frutarom's 15,000 products are sold to more than 5,000 customers in 120
countries around the world. The Frutarom Group has 1,200 employees worldwide
and manufacturing facilities in Europe, North America, Israel and Asia.

Frutarom operates through two divisions:

- Flavors Division, which develops, produces and markets
flavor compounds and food systems.

- Fine Ingredients Division, which develops, produces and
markets natural flavor extracts, functional food ingredients, natural
pharmaceutical/nutraceutical extracts, specialty essential oils, citrus
products and aroma chemicals.

Frutarom provides tasty and healthy solutions to its customers
fulfilling our vision: Tobe the Preferred Partner for Tasty and Healthy
Success.

Since 1993, Frutarom has successfully implemented a rapid
growth strategy that combines organic growth at above-industry levels with
strategic acquisitions of synergistic companies.

Frutarom Industries Ltd. is a public company whose stock is
listed on the Tel Aviv and London Stock Exchanges. As of January 1, 2003,
Frutarom has been included in the Tel Aviv 100 Index.

For further information, visit our website: www.frutarom.com.

Company Contact
    Ori Yehudai, President & CEO
    Frutarom Ltd.
    Tel: +9724-846-2401
    E-mail: oyehudai@frutarom.com