Swedish-Israeli joint venture to double infant formula fatty acid output by 2013

By Shane Starling

- Last updated on GMT

Related tags: Infant formula, Fatty acid

Swedish-Israeli joint venture to double infant formula fatty acid output by 2013
Swedish supplier AarhusKarlshamn (AAK) and Enzymotec, its Isreaeli partner in a proprietary infant formula fatty acid project, are expanding production at AAK’s Swedish base as Chinese demand booms.

Demand was growing so quickly for the trademarked InFat formulation that AAK VP Renald Mackintosh said mimicked the fatty acid ratios in typical human breast milk, the JV begun in 2006 had little option but to expand.

“We expect to double output by the start of 2013,” ​Mackintosh said, adding volumes were confidential.

He said the expansion in demand was being primarily driven by a Chinese infant formula market growing at more than 20%, growth which had proven decisive in Nestlé’s €9bn decision to buy Pfizer Nutrition this week.

The Pfizer division was the third biggest manufacturer in China’s €4.57bn infant formula market with 8%market share behind Mead Johnson with 16% and Danone with 14%. Nestlé had just 4% there.

With Chinese birth rates remaining high despite the one-child policy, the market is set to double to about €9bn by 2016.

The AAK-Enzymotec JV supplies “at least one”​ of the world’s biggest infant formula suppliers, Mackintosh said of the premium blend.

“extremely important market”

In its 2011 annual report released yesterday, AAK referenced the establishment of a sales company in China last year with, “an aim to be a global business partner with a strong local presence in order to serve our global and local customers.”

“A country-based organisation considerably strengthens our ability to deliver our speciality oils and fats to existing and new potential customers and to develop the good contacts that we have already established on the Chinese market.”

AAK sales increased 13% in 2011 to SEK16.7 million (€1.88m) from SEK14.8m (€1.67m) in 2010, with operating profit at SEK911m (€102,000).

Enzymatic process

The JV website states: InFat is based on a patented enzymatic process providing structured triglycerides with a high level of palmitic acid in the middle (sn-2) position of the triglyceride. This unique fat enables easy digestion and optimized uptake of calcium, fat recovery and energy.”

Research has linked the blend with:

  • Reduced stool hardness
  • Reduced calcium soaps formation
  • Increased calcium retention
  • Larger skeletal mineral deposition
  • Increased fat absorption and fat recovery

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