The plant, funded through a SEK 30m (€3.1m) investment, is now operational and will supply ingredients for infant nutrition products as part of a joint venture with biotech group Enzymotec.
Demand for infant formulas has led to ingredients suppliers investing into research and development in the infant nutrition market.
Market estimates suggest that the market for formula milk is worth around €597m, driven increasingly by the use of ingredients such as omega-3 and probiotics in a bid to play up the products’ nutrition benefits.
However, AAK chief executive officer Jerker Hartwall said that construction of the new factory reflected a wider strategy across all its operations, targeting what the company calls ‘health promoting solutions’.
“Selective acquisitions are complementing this [health] strategy, and the acquisition of Croda Food Service in the area of Bakery and Rapsona came into effect in 2008 with a total turnover of approx SEK 300m (€31m),” he stated.
The company said specializes in providing high value-added specialty vegetable oils across a number of products ranging from confectionery to cosmetic goods.
Infant innovation drive
Nonetheless, AAK’s strategy for infant nutrition comes as a number of its rivals and finished product manufacturers also move to find lucrative new areas in the segment.
Earlier this month, Friesland Foods Kievit developed what it calls a 'breakthrough' encapsulation technology that could incorporate omega-3 (DHA) and omega-6 (ARA) into hypoallergenic infant formula.
This followed on from the formation of a new division of the company back in March, focusing on usingencapsulated products to offer functional benefits for finished goods.
Even finished goods companies like Russia-based Wimm-Bill-Dann have invested new production sites designed to tap into growing demand in its markets for functional and infant nutrition products.
The group, which is one of the leading dairy producers within Russia and surrounding markets like Ukraine, said the construction of its baby-food facility at the company's Manros-M plant in Omsk would step up supply of functional products.