AAK Invests Over EUR28m in China Facility

AAK has decided on some significant add-on investments to increase capacity and support volume growth for, in particular, its Special Nutrition and Bakery segments. The decision comes 18 months after inaugurating the production facility in Zhangjiagang, China.

“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. 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,” said Johan Westman, president and CEO.

The investments, estimated at approximately SEK300m (EUR28.3m), 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 bakery solutions. Furthermore, AAK will invest in some base production equipment and infrastructure to accommodate the general domestic growth.

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

“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,” said Torben Friis Lange, president AAK Asia.

The investments are expected to be commissioned during the second half of 2020.