AAK UK continues to expand specialist focus

By Karen Willmer

- Last updated on GMT

Related tags Value added

Specialist fat and oil manufacturer AarhusKarlshamn (AAK) UK has
acquired Croda Food Services in a bid to expand its specialist
product range.

Croda Food services, part of Croda International, is a specialist manufacturer of vegetable oils to the bakery industry, including for bread, cakes and crumpets.

This follows its acquisition of UK sauces and condiments manufacturer Lions Food in April last year for an estimated price of between £2.5m (€3.7m)-£3m (€4.4m), and the merger of the two companies Aarhus and Karlshamn in late 2005.

"Our goal is to have an efficient and streamlined AAK by 2008, with strong market positions," the company said last year, when it announced it was focussing on growth in speciality products.

The acquisition last week with Croda Food Services involves the takeover of its headquarters in Oldham, where it will continue to operate under the name AAK Bakery Services.

"We are delighted to have concluded this deal which fits so well with our strategy of offering speciality oil-based products and services, and, as a major player in the UK bakery fats sector, enhancing our product range in this way will offer our customers a more complete package to meet their needs," said Ian McIntosh, president of AAK UK.

AAK also joined forces with Israeli firm Enzymotec last month to deliver advanced lipids for the food industry, highlighting the company's overall interest in expanding globally and into new markets.

In its May first quarter interim report, AAK announced operating profit of SEK162m (€17.7m).

"The speciality strategy focusing on value added products with higher margins is progressing well," company president Jerker Hartwall said in May.

"A new rationalisation programme with generate SEK100m (€11m) per annum on a rolling basis late 2009 at a cost of SEK150m (€16m) .

I repeat that 2007 will give a clear improvement in operating profits compared with 2006, which involved major changes."

This comes as the company also announced an investment of SEK400m (€43.6m) in a joint venture with Swedish firm Lantmannen Energi for rapeseed crushing.

It said the investment was in order to meet the increasing demands of the food industry, by increasing the production of rapeseed oil for foodstuffs and biodiesel.

The company expects the jointly owned crushing plant to 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," Hartwall said regarding the venture.

AAK fats are used by food, chocolate, confectionery and cosmetics industries globally.

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