SWEDISH company AarhusKarlshamn (AAK) is building a customization plant in Batangas, the first of its kind in the Philippines.
Michael Skriver, president for AAK Philippines, said construction of its first facility is set to begin by mid-August and expected to be operational by 2019.
“The whole idea is because since it’s a significant amount [of investment], we want to make a small factory that’s ready by the new year on some areas then we go for the big one (facility),” he said after the groundbreaking ceremony in San Pascual, Batangas.
AAK’s plant is being built on a land owned by oils and fats refinery San Pablo Manufacturing Co., which is under Coconut Industry Investment Fund-Oil Mills Group (CIIF-OMG).
The plant will customize and mix oils and fats into “value-added” ingredients which will be used for various products such as personal care, infant milk, confectionery and chocolates.
Mr. Skriver said the first facility, covering 3,000 square meters (sq.m.), will cater to the local food industry.
The second phase will involve the construction of a bigger factory, which will cover 5,000 sq.m. Mr. Skriver said the second facility can be used for export purposes, given the proximity of the location to the port.
“With this new operation, we will be able to better manage the local supply chain and the export markets. The Philippines is one of the fastest growing economy in Asia driven by strong, and domestic consumption in the country. With a fast growing economy the demand for speciality and semi-speciality edible oils in Philippines is expected to grow strongly,” Mr. Skriver was quoted as saying in a statement.
CIIF-OMG Board Chairman Eddie P. Delima said talks with the Swedish-based company only began in March, and the agreement was signed in May. This is CIIF-OMG’s first deal with a foreign company.
“Technically it’s their project (customization facility). Our purpose only is to let them occupy our premises… We also have a supply agreement that in terms of raw materials we have, the majority, the bulk of what edible oil, they will be getting it from us,” Mr. Delima said.
Mr. Delima said the company is willing to extend its other services to AAK through their existing operations.
“Once they have the special solutions, we can market also because we have marketing — through Minola network. We can carry also their products through the distribution. So it’s a symbiotic [relationship],” he added, referring to CIIF-OMG’s coconut cooking oil brand Minola. — Anna Gabriela A. Mogato