AAK tables option to further optimise its European bakery business

By Gill Hyslop

- Last updated on GMT

AAK is considering a closure of its bakery fats site in Merksem, Belgium. Pic: GettyImages/Prarinya Thongyad
AAK is considering a closure of its bakery fats site in Merksem, Belgium. Pic: GettyImages/Prarinya Thongyad

Related tags Aak Bakery plant-based margarine fats and oils

The plant-based oils specialist is planning to close its bakery fats plant in Merksem, Belgium, which will affect a 100-strong workforce.

The site mainly produces margarines and shortenings for the industrial market across Europe. Production will be transferred to AAK’s sites in Hull, UK, and Zaandijk, the Netherlands, after which Merskem site will be closed.

The company has entered a formal consultation process with union delegates to carry out the proposed closure.

The move is part of AAK’s restructuring plan within the bakery segment to improve cost efficiency and increase competitiveness. The closure of the site in Merksem would lead to annual cost reductions and productivity gains of approximately SEK 51m (£4.32m), expected to reach full run rate by the end of 2022.

However, if implemented, the restructuring is expected to cause non-recurring costs of SEK 304m (£25.8m), for which a provision will be made in the second quarter. SEK 203m (£17.22m) of this is a non-cash flow impact.

“The proposed production consolidation would optimise our bakery segment in line with our portfolio strategy,”​ said Johan Westman, president and CEO, AAK Group.

“We will maintain our strong presence in the European industrial bakery market and continue to support our customers with the same high level of dedication and service.”

In order to manage the additional volumes in Hull and Zaandijk, some production equipment will be transferred from Merksem, along with selective investments.

Malmö, Sweden-headquartered AAK has more than 20 production facilities, 15 dedicated Customer Innovation Centres and 25 regional sales offices, employing more than 3,900 employees. The Nasdaq Stockholm-listed company specialises in plant-based oils for a range of markets, including bakery, chocolate and confectionery, dairy, special nutrition and foodservice, among others.

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