Fazer becomes 'significant player' in global oats with Frebaco acquisition

By Vince Bamford

- Last updated on GMT

Fazer launched its mills operation in 1971
Fazer launched its mills operation in 1971

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Finnish bakery and confectionery business Fazer Group has expanded its presence in the oats market with the acquisition of Swedish mill Frebaco.

Fazer said the deal would double its oats capacity and make it a “significant player​” in global oats exports.

Located in Lidköping, Sweden, Frebaco has oat, wheat and rye mills making products for the food industry from grain grown in the Västgötaslätten area.

It also produces Frebaco Kvarn branded organic muesli and bars, and the acquisition will take Fazer into the Swedish retail market for the first time.

Net sales from the business, which was founded in 1981, were SEK268m ($32.5m) in 2015.

Increasing demand for oats

Fazer has been growing its oats business through the Fazer Mills division, which was founded in 1971 and produces grain products such as flour, flakes and mixes for bakeries and other food industries. In response to increasing demand for oats, the business built an oat mill in Lahti, Finland, in 2013, and is set to double its capacity next year.

Last year it began licensing a technology developed and patented by VTT Technical Research Centre of Finland that enables it to extract functional ingredients from oats, including oat beta-glucan, protein and oat oil.

Fazer said it would aim to grow its milling business internationally with the Frebaco acquisition, and export oats from Finland and Sweden to central European markets and Asia.

Invested €15m in Finnish oats

During the past few years, we have already invested €15m ($17m) in Finnish oats​,” said Fazer Group president and CEO Christoph Vitzthum. “With this acquisition, Fazer will be a player in the international milling business​.”

Fazer Mills boss Heli Arantola added that oats were an “international success story for the milling business​”.

Fazer and Frebaco have both been working with R&D and product development of oats in cooperation with universities and scientists​,” she said. “Now we join forces for an even deeper know-how of this Nordic super grain​.”

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