The companies have inked a deal that will see Lantmännen take control of an oat mill, with a capacity of 55,000 tonnes, and oat ingredients processing facility in Kimstad outside Norrköping. This will deliver opportunities to expand its oat capacity and invest in additional processing of oats, the Swedish group said.
The facility has around 35 employees and is currently producing oat protein, beta glucan and oat flour.
Healthy demand for oats
Lantmännen said oats are a key crop for Swedish agriculture and Lantmännen’s members. The company noted “big global interest” in the crop because it offers several important health benefits. As a result, demand for oat products is “increasing sharply”.
Additional oats capacity will enable Lantmännen to meet the growing demand from customers in the Nordic food industry.
“Oats are a strategic investment area for Lantmännen and the further development of our oats business is a key part of our Field to Fork 2030 strategy,” said Per Olof Nyman, CEO and president of Lantmännen.
“We are already strongly positioned in oats and this acquisition gives Lantmännen access to a modern mill that complements our existing production capacity within oats and creates a unique opportunity to develop and manufacture ingredients based on oats as the raw material.”
Detailing its strategy in the oat segment, Lantmännen said it is taking a long-term approach to investments in processing, research and innovation within oats.
This approach is reflected in research and innovation to develop new oat products. Lantmännen pursues research both internally and via partners such as ScanOats in Lund and the partly owned Swedish biotech company CropTailor.
Lantmännen is the Nordic leader in oats with three oatmeal mills in Sweden, Denmark and Norway. The acquisition is complementary to its existing business, the group suggested.
The manufacturing processes at the facility have many similarities with production at Lantmännen Reppe and once the acquisition has been completed, the facility will become part of the Energy Sector at Lantmännen.
“Lantmännen’s Energy Sector already has specialist expertise within the processing of wheat, and oat products will be an excellent complement to our current business. The acquisition enables Lantmännen to increase the production capacity of heat-treated oats significantly and gives us an opportunity to create added value within oat processing. It also creates synergies both within the Energy Sector and our other businesses at Lantmännen,” said Magnus Kagevik, head of the Energy Sector at Lantmännen.
For its part, Tate and Lyle said the sale would enable it to focus on core strategic areas.
Joan Braca, president of food & beverage solutions said the agreement was a “good outcome” for its oat ingredient employees and customers. The deal “enables us to focus our business on serving our customers in our main food and beverage categories,” she added.
The agreement was signed on March 22 and the transaction is expected to be completed by end of March.