Chinese ventures: AAK makes US$32m investment in special nutrition and bakery segments

12 Mar 2019 --- Eighteen months after inaugurating its production facility in Zhangjiagang, China, vegetable oils and fats supplier AAK has made “significant add-on investments.” Estimated at approximately SEK 300 million (US$32 million), these investments will seek to increase capacity and support volume growth for, in particular, its Special Nutrition and Bakery segments.

“China is a key growth market for AAK and the country will continue to present attractive opportunities for profitable and sustainable growth in the specialty and semi-specialty vegetable oils and fats market,” says Johan Westman, AAK President and CEO. “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 investments include a stand-alone processing plant for Special Nutrition, focusing on the production of infant nutrition specialty solution INFAT, sold through Advanced Lipids, a joint venture between AAK and IFF. AAK will also add additional capacity in the Bakery segment to meet the strong demand for the company’s high-end bakery solutions. Furthermore, AAK will invest in some base production equipment and infrastructure to accommodate the general domestic growth, says the company.

AAK’s production site in Zhangjiagang was inaugurated in September 2017 with an annual production capacity of 100,000 MT but was built and prepared for further expansions.

“The processing plant for Special Nutrition will significantly strengthen the product and service offering for end-customers,” notes Torben Friis Lange, President AAK Asia. 

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

The investments are expected to be commissioned during the second half of 2020, according to the AAK announcement. 

In October 2018, Swedish-Danish company AAK inaugurated its new Customer Innovation Center in Singapore to further strengthen its capabilities and customer co-development approach in the Southeast Asian market.

FoodIngredientsFirst has reached out to AAK for further details.