Aarhus & Karlshamn become major force in fats

By Lorraine Heller

- Last updated on GMT

Related tags: Fat

Two leading European manufacturers of oils and fats for the
cosmetics and food industries last week joined forces in a move the
companies hope will allow them to significantly expand their
businesses in the US and Northern Europe.

Denmark's Aarhus and Sweden's Karlshamn, who first announced their intention to merge in May this year, said that customers' points of contact will remain unchanged. The company, which will continue to supply speciality fats and oils for a wide range of products including cosmetics, bakery, confectionery and dairy goods, said it will employ 2,500 staff at plants and sales offices around the world. It forecasts a turnover of around SEK 10bn (€1bn). "With production units in seven different countries, AarhusKarlshamn will be a world leader in the area of environmentally friendly, high value-added vegetable oils and fats," the company said in a statement. The Karlshamns Group, which last year had sales of SEK 3,629 million (€390m), had formed its Lipids for Care division in 2000 for the development and marketing of the Group's fats to the cosmetics industry. It has since been significantly developed in response the industry's growing demand for skin care and general cosmetics products containing vegetable-based raw materials. Previously Karlshamn's mainstay business had been the supply of fats and oils to the European food industry, but despite being a much smaller part of the business, the growth of Lipids for Care consistently out-stripped its food business. Aarhus, which last year reported a revenue of DKK 4,972m (€666m) focused primarily on supplying ingredients for the confectionery industry, but revealed that its vegetable-based products for skin creams and dietary supplements represented a fast-growing business. "The strategic rationale behind combining the companies has long been evident as it offers prospects to capitalize on a stronger platform, thereby improving the market positioning vis-à-vis competitors," said AarhusKarlshamn in a statement. "The combined entity is believed to be able to achieve substantial synergies both in terms of improved utilisation of the existing plants and equipment, but also in terms of opportunities for improved capital expenditures," it added. The company is currently in the process of defining its organisational structure and was unable to comment. External links to companies or organisations mentioned in thisstory: AarhusKarlshamn Aarhus Karlshamn

Related topics: Business & Financial

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