AAK targets expansion in China with $31m investments

Vegetable oils and fats producer AAK said that it will invest about SEK300m ($31.9m) to increase capacity at its production facility located in Zhangjiagang, China.

The company said the significant add-on investments will increase capacity and support volume growth for, with focus on its special nutrition and bakery segments.

AAK president and CEO Johan Westman said: “China is a key growth market for AAK and the country will continue to present attractive opportunities for profitable and sustainable growth in the speciality and semi-speciality vegetable oils and fats market.

“AAK has established a solid presence in the Chinese market and with these new investments we are very well positioned to continue to grow organically and capture market share.”

The expansion will include a stand-alone processing facility for special nutrition that will focus on the production of infant nutrition speciality solution INFAT, which is sold through Advanced Lipids, a joint venture between AAK and IFF.

The investment will also be used to expand AAK’s bakery segment in order to meet the growing demand for its bakery solutions.

The company said that it will invest in base production equipment and infrastructure in order to accommodate general domestic growth.

Its production site in Zhangjiagang was opened in September 2017 with an annual production capacity of 100,000mt.

AAK Asia president Torben Friis Lange said: “The processing plant for Special Nutrition will significantly strengthen the product and service offering for end customers.

“Combined with the investment related to our high-end bakery solutions, we will support our long-term growth in the fast-growing and very important Chinese market.”

The company noted that its investments are anticipated to be commissioned during the second half of 2020.

Last month, AAK announced that it is acquiring Dutch firm MaasRefinery, which specialises in toll refining of vegetable oil and fat for the food industry.