AAK and Lantmännen Intend to Form Joint Venture for Rapeseed Crushing

05/07/07 AarhusKarlshamn (AAK) and Lantmännen Energi have signed an agreement of intent on the formation of a joint venture company (51/49) for investment in increased capacity for the production of rapeseed oil for foodstuffs and biodiesel in Karlshamn.

The use of vegetable oils in the energy sector is increasing rapidly. This, combined with the competitive pressure currently facing the retail trade, is putting all players in the food industry’s value chain under strong pressure to bring down prices, resulting in increasing demands for innovative, cost-effective solutions. For that reason have AAK and Lantmännen Energi signed an intention agreement with purpose to invest in a new crushing plant to satisfy the increased demands.

"The new plant will have a capacity sufficient to crush and refine all Swedish rapeseed. With a joint, large scale plant we will satisfy the increased demand for rapeseed based products for both foodstuffs and biofuels," says Magnus Jörsmo, President Business Area AAK Technical Products & Feed.

The planned investment at some SEK 400 million signals a significant increase in capacity over that currently in place at Karlshamn, making it by far the greatest in any of the Nordic countries. Use of the most modern technology available to the industry will ensure that the plant is one of the most efficient in the world. The plant will be placed within AAK’s plant in Karlshamn where also Lantmännens production of biodiesel (RME) is placed.

"The joint venture will further strengthen our market position and secures a Swedish biodiesel with high quality, while at the same time providing prerequisites for increased production of biodiesel within Lantmännen. The investment will strengthen the competitiveness for Swedish farmers," says Bengt Håkansson, President Business Area Lantmännen Energi.

The jointly owned crushing plant is scheduled to come on line in the second half of 2009 and will generate profits from the end of 2009.

"We are striving for a growing proportion of high value added products, and a jointly-owned company for the crushing of rapeseed oil is an important step in the right direction," says Jerker Hartwall, AAK’s President and CEO.