Chocolate replacer firm AarhusKarlshamn greets the market

Last month number one Scandinavian fats and oils firm Karlshamns consolidated its market position, linking-up with fellow oils supplier Aarhus United after the latter's majority shareholder, Malaysian firm United International Enterprises (UIE), announced it would shed its 46 per cent slice of the firm.

This week the new company, now on the Stockholm Stock Exchange, said its most important business area lies within the food industry, accounting for 60 per cent of the company's turnover.

Speciality fats for the chocolate and confectionery industry account for almost 30 per cent, while technical products account for 10 per cent. Oils for pharmaceuticals and cosmetics is the smallest business area, but it is "characterised by strong growth"​, says AarhusKarlshamn.

The firm will be based on six business areas: food ingredients Continental Europe, food ingredients UK, food ingredients Nafta, speciality fats for the chocolate and confectionery industry, food tech and feed, and oils for pharmaceuticals and cosmetics.

"We can meet the demands of the customers with production in seven countries. I see a very strong company emerge,"​ said an upbeat Jerker Hartwall, new managing director of AarhusKarlshamn, and former group CEO at Karlshamns.

The merger ends months of speculation as to the fate of the Danish cocoa butter replacer firm Aarhus United.

The move also reflects a trend among businesses in today's archly competitive food industry climate to consolidate for strength.

The rising power and ongoing growth of the multiple retailers is putting constant pressure on ingredients companies to keep up with the pace, deliver products at competitive prices and guarantee supplies.

A gain in critical mass through consolidation, and economies of scale, are two of the only routes open to them, providing sufficient leverage to meet the challenge.

The main office for the new firm will be established in Copenhagen.