The Danish firm had announced plans to build a new plant in early 2011 but at that time a location was undecided.
The Malaysian facility is set for completion by the first half of 2013 and will align business capacity with the surging processed foods market across Asia Pacific, the company said.
Jakob Thoisen, CEO of Palsgaard, told FoodNavigator-Asia that Malaysia was chosen “due to local availability of raw materials and good outbound logistics”.
The new plant will be built from scratch and has been designed with energy consumption and the environment in mind, Thoisen said, which is important “as Palsgaard wants to contribute to a sustainable future.”
Operations will run at 20,000 metric tonnes per year and cater to the entire Asia Pacific region and beyond. It will produce a wide variety of emulsifiers, stabilizers and blends for bakery, confectionery, dairy, ice cream, margarine, mayonnaise and dressings applications.
It will enable us to cater more efficiently and faster to our already significant Asia customer base, the CEO said.
“It’s natural for Palsgaard to expand its activites in the part of the world where the growth of processed foods is the highest,” Thoisen said.
This increase in demand is fuelled by urbanisation, increased incomes and a surging population, he said.
A Global Industry Analysts (GIA) report suggested that Asia Pacific will see a 9% CAGR in its emulsifier market until 2017, with China its strongest growth engine.
GIA said this surge will be driven in particular by a sustained demand for natural emulsifiers and low-fat foods within the processed foods segment.
Strengthening traction
Palsgaard has two blending facilities in Asia, in Shanghai and the Philippines, which are predominantly focused on bakery and dairy applications. It also has a regional sales office in Singapore.
The emulsifier firm sealed a distribution deal in China with DPO International in June 2012 to secure a stronger ‘reach’ across the country.
It said the move “will offer food manufacturers in China the best possible solutions in emulsifiers and stabilizers”.