AAK's growth reaches Grenaa

AAK’s growth reaches Grenaa

AAK Denmark A/S in Aarhus has been characterised by constant growth for many years, not the least due to the demand for shea kernel oil, which keeps increasing. Now, shea kernels are also unloaded in Grenaa.

AAK is currently directly or indirectly buying kernels from more than two million women in West Africa. Some of these kernels are now being unloaded at the Port of Grenaa, which has turned itself into an attractive business partner to AAK because of the Port’s flexibility and service level.

“Here, you can see how the women collect the shea kernels in their husbands’ fields. Right now, our direct sourcing setup involves about 235,000 women in Burkina Faso and Ghana. A significant increase in the number of women, due to the huge demand for full traceability throughout the value chain, which we are facing among several of our customers.”

Lone Frier Leth from AAK Denmark A/S enthusiastically shows us a video, illustrating the first phase of the shea kernels’ journey from Africa to the South Port in Aarhus, where the oil from the shea kernels has become a core product. The company is the Danish division of the AAK Group, previously known as AarhusKarlshamn AB.

Lone Frier Leth is division manager of “Sourcing and trading execution”, in charge of AAK Denmark’s logistics. She met us in a big office in the company’s beautiful, old administrative building with a view of the enormous production plant in Aarhus.

I AM PASSIONATE ABOUT MY WORK

“In our division, we ensure that the correct kernels and crude oils arrive at the company in due course, with the correct ships and in adherence with all food safety and hygiene regulations. We are also responsible for ensuring that the oils and fats that we produce are dispatched in time and properly to AAK factories in other countries, where they are used in the production.”

We soon sense by Lone Frier Leth’s enthusiasm, voice and manner that she is a woman, seriously struck by the joy of working.

“I have a fantastic job. I experience new and exciting challenges every day, because a lot of things simply have to be 100 percent correct in a food company in order to provide the high quality, which we want to be known for. Working with West Africa, where our shea kernels come from, is also a great challenge, since things often differ greatly from what we know in Denmark,” she says with a smile.

FROM AARHUS PALM KERNEL FACTORY TO MORE THAN 3,800 EMPLOYEES

The AAK Group is currently based in Malmø, Sweden but the Danish part of the AAK adventure began in Aarhus with “Aarhus Palmekernefabrik” (Aarhus Palm Kernel Factory), which was founded in 1871 and changed name into “Aarhus Oliefabrik” (Aarhus Oil Factory) in 1892. The factory initially produced oil cakes for agriculture from pressed palm kernels, but gradually as the margarine business began to flourish, margarine quickly became the main business area. In 2003, the company changed name into Aarhus United and, in 2005 into AarhusKarlshamn AB after the merger with Swedish Karlshamn AB.

Today, the company extracts vegetable oil from a variety of plants, including palms, sunflowers, rapeseed, shea, soya etc. and AAK is currently one of the “world’s leading manufacturers of specialized vegetable oils and fats”. The company’s oils are used in a variety of products such as food, dairy products, chocolate, formula and cosmetics. AAK sells its oils and fats in more than 100 countries and has more than 3,800 employees – about 200 of them work in the division in Aarhus South Port.

TREMENDOUS GROWTH RATE FOR MANY YEARS

For many years now, the AAK Group and AAK Denmark A/S have been growing and growing.

“We have experienced a tremendous growth rate over the past number of years. Partly because we are good at meeting the evolving needs, which result from the fact that we highly prioritise research and development in close cooperation with the customers, and partly because we have gained a foothold on new markets such as the market for nutritional food for children and seniors,” says the 51-year old division manager, who joined AAK Denmark A/S after 20 years of experience within the shipping and transport industry.

SHEA KERNEL OIL IN CHOCOLATE

In Aarhus, Lone Frier Leth and her colleagues only work with two ingredients, which are hauled to the Port of Aarhus in large ships: palm oil and shea kernels. They process the palm oil from Malaysia and Indonesia and send it to other AAK divisions, where the end products are made. They extract shea stearin from the shea kernels, primarily sold to the chocolate industry.

SOCIALLY RESPONSIBLE BUSINESS MODEL

Through AAK’s direct sourcing setup – also referred to as the “women’s group program”, AAK is still having major amounts of shea kernels collected in West Africa to cover the increasing demand for fully traceable products. The main part of AAK’s very large volumes of shea kernels come from about two million women via the more traditional sourcing setup, where AAK’s suppliers are the contact to women and purchasers. AAK’s unique co-development approach – within the field of shea and in general – is a contributory reason for the increasing demand for ingredients manufactured by AAK.

The interest in this business model among AAK’s customers, enabling AAK Denmark A/S to contribute to improved living conditions for African women through their African subsidiaries and contribution to environmentally sustainable development of the country, is rising.

“We currently cooperate with 235,000 women in Burkina Faso and Ghana and they receive advance payment at the beginning of the shea season. Thus, there are no intermediaries who can press the prices that the women charge, meaning that they have a guaranteed minimum income, for instance allowing them to send their children to school and buy crops,” says Lone Frier Leth.

FEWER TREES ARE CUT DOWN

Every morning, the African women collect the shea fruits that fall from the wild-growing shea trees and subsequently cook them in order to the stop enzyme generation in the kernels.

AAK employees in West Africa help the women build special ovens for cooking shea. The ovens consume considerably less firewood and reduce smoke inconveniences for women and children. AAK employees also teach the women how to use the nut shells as firewood – both things ensure that fewer trees are cut down in West Africa.

So far, about 10 percent of the shea kernels are collected by African women who are members of AAK’s women’s group project. The company buys the rest of its shea kernels from suppliers in the so-called shea belt, which includes Nigeria, the Ivory Coast, Burkina Faso, Togo, Benin, Mali, Guinea, Ghana and other countries.

THE PORT OF GRENAA IS FLEXIBLE AND PROACTIVE

AAK staff in West Africa collects the cooked and dried shea kernels from the women who are members of the AKK women’s group program and haul them to large warehouses in the inland, from where the kernels are forwarded by ship to Aarhus, now also to the Port of Grenaa.

“Our growth and increased production are the primary reasons for having started cooperating with the Port of Grenaa – as a supplement to the Port of Aarhus. Although we have only been dealing with the Port of Grenaa for a year, it has already become an important business partner. At the Port of Grenaa, people are flexible, proactive and service-minded and they react fast when we need a solution that accommodates our needs. The port has all the required facilities – and if we require other facilities, the port will find them. The port for example built two warehouses for our shea kernels with lightning speed. I expect that we will be using the Port of Grenaa more and more in the future,” Lone Frier Leth says convincingly.

GROWTH CONTINUES

As AAK Denmark A/S continues to grow, Lone Frier Leth works a lot during the week, so she spends her evenings and weekends with her family, consisting of her husband, 18-year old daughter and 16-year old son, whom she lives with in Aarhus. She answers promptly when asked about the expected development of AAK Denmark A/S over the next five years:

“I only see growth ahead. Last year, we invested in an increase of productivity in the Aarhus factory, and since we can sell all that we can produce, I keep developing together with AAK,” Lone Frier Leth says with a smile.

Lone Frier Leth, manager of the logistics department of AAK Denmark A/S at the Port of Grenaa, with which the Aarhus-based company has now be working for a year: “At the Port of Grenaa, people are flexible, proactive and service-minded and they react fast when we need to find a solution that accommodates our needs,” Lone Frier Leth says, here with her colleague René Blondin, Site Logistic Manager at AAK Denmark A/S.