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AAK Annual Report 2015

CEO: A year of growth, innovation, international expansion and progress 2015 has certainly been an eventful year for AAK. Strategic acquisitions and partnerships, large greenfield factory construction projects and new, game-changing and awardwinning innovations have been some of the highlights of the year. Moreover, the positive trend from 2014 has continued and 2015 showed an all-time high operating profit. More importantly, with this foundation and more, future outlooks are good too.   The growth in operating profit is to a large extent a result of the continuing very strong improvements within Chocolate & Confectionery Fats.   Food Ingredients has also had a good year, but with more modest improvements. Bakery has recovered after a challenging 2014 and is again showing organic growth. Infant Nutrition has shown strong development due to good organic growth in our Akonino® business, and our Dairy segment has during the second half of the year continued to show impressive growth despite very low milk fat prices. Expanding our geographical footprint In September, we announced that we had acquired 51 percent of the shares of Kamani Oil Industries Pvt Ltd., one of India’s leading speciality and semi-speciality oils and fats companies. India, with its growing middle class, a rapid urbanization and a rising per capita income, is a very interesting growth market for AAK and the acquisition will reinforce our speciality oils and fats strategy and offer a strong foothold in another fast-growing economy.   The following month, we announced that we had established a partnership with very well reputable Miyoshi Oils & Fats Co. by forming a new company together for the Japanese market, AAK Miyoshi JP, of which we will own 70 percent.   With global customers and regional leaders, both India and Japan are very important and attractive markets to be present in. Through these partnerships we will further strengthen our presence in the strategically important Asian market.   In addition to these very interesting acquisitions and partnerships, both of our new factories, in Jundiaí, Brazil and Zhangjiagang, China, will be up and running during 2016.   With these expansions into China, India, Brazil and Japan we will even better be able to fully follow and support our global customers across world markets which will mean a great advantage for us.   In November, we took over the activities of Belgian nutritional ingredient supplier TLC. TLC has been a customer of AAK for many years and is specialized in extracting phospholipids from egg yolk. These phospholipids offer additional benefits when included in nutrition formulas and reinforce functions of the brain, the eyes and the immune system at all life stages. By blending these phospholipids with Akonino® we will be able to extend our product range within the infant nutrition market and the nutrition markets in general, with new advanced customer co-developed products. New, award-winning innovations During the year we have launched some very interesting and groundbreaking innovations, among them our chocolate solution TROPICAO™ which has been developed for hot climate markets such as Latin America, Asia and the Middle East. Chocolate with TROPICAO™ will maintain a non-bloom appearance as well as its sensory attributes when exposed to higher temperatures. This solution could be the largest value adding novelty in our industry since many years and early feedback from customers has been very strong. In December, TROPICAO™ received an award for “Best confectionery innovation” at Food ingredients Europe, a global meeting place for all stakeholders in the food ingredients industry.   We have also launched the bakery solution Akopastry HP, which has been developed for industrial puff pastry manufacturers. Akopastry HP, which shows significant cost efficiency as well as an improved nutritional profile, was also honored at Food ingredients Europe and awarded “Best bakery innovation”.   These awards are great recognitions of our innovation capabilities as well as of the teams behind the innovations. Responsible growth We continue to make good progress within our sustainability activities.   We have seen important developments within our palm oil commitments, specifically on the implementation of our palm oil policy including traceability to mills. By the end of 2014, AAK had achieved 100 percent traceability to mill for all palm oil sourced at origin and 97 percent overall for palm oil, palm kernel oil and their derivatives. In parallel, qualitative risk assessments against AAK palm oil requirements had been completed for all identified supplier mills. 4


AAK Annual Report 2015
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