Swedish vegetable oils and fats producer AAK has acquired India’s Arani Agro Oil Industries.

The acquisition, which was expected to close before the end of the year, was in line with AAK’s strategy to expand geographically and increase its market share in India's speciality oils and fats market, the company said on 25 November.

Arani operates out of Kakinada Port on the southeast coast of India supplying edible oil products including confectionery fats, ice cream fats, dairy fat substitutes and bakery fats.

Including acquisition costs, AAK said it would be investing an estimated total of US$193M-US$289M (SEK 200-SEK 300M) to increase capacity and improve efficiency in the newly-acquired production facility.

In addition, the investment would support the wider development of the region, AAK said.

“We have seen strong growth from our operations in India, and the acquisition of Arani is a strategic next step to further accelerate growth in a key market,” AAK India president Dheeraj Talreja said.

“The acquisition gives AAK a platform for serving a high concentration of strategic customers within chocolate & confectionery fats, nutrition, bakery, and dairy in the region.”