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EIB lends EUR 40 million to Fazer for research and development

In Finland, the European Investment Bank (EIB) and confectionary major Oy Karl Fazer Ab (Fazer) have signed a EUR 40 million loan agreement to finance Fazer’s research, development and innovation (RDI) activities in the coming years. Specifically, Fazer will fund the construction of a new plant, where the sweetener xylitol will be extracted from discarded oat hulls.

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The European Investment Bank (EIB) and confectionary major Oy Karl Fazer Ab (Fazer) have signed a EUR 40 million loan agreement to finance Fazer’s research, development and innovation (RDI) activities in the coming years. Specifically, Fazer will fund the construction of a new plant, where the sweetener xylitol will be extracted from discarded oat hulls.

The xylitol extraction plant is will be built next to the mill, located in Lahti, Finland. It is expected that the new facility will produce 4 000 tonnes of xylitol per year out of 20 000 tonnes of oat hulls, a by-product of the firm’s milling business, thus also reducing waste.

The project will also support RDI activities relating to Fazer’s bakery and confectionery products, biscuit and grain products, plant-based meals and non-dairy products, with a focus on developing new ingredients to improve quality and shelf life, as well as new products for the well-being segment. The R&D activities will mostly be carried out at Fazer’s Vantaa HQ, and to a lesser extent in Lidköping in neighbouring Sweden.

Fazer sees food as a solution and foodtech makes the food system more productive, affordable, sustainable and healthy. As sustainability is an integral part of Fazer’s strategy, innovations supporting the circular economy, such as the production of xylitol from oat hulls, represent a future direction for the food industry. As we have already now seen a huge interest in oat-based xylitol and an increasing demand for xylitol, we have adjusted our original investment plans to build a solid foundation for potential future expansions of the xylitol capacity. Accordingly, we have increased the investment by approximately EUR 10 million, said Christoph Vitzthum, CEO of Fazer.

Fazer is transforming itself into a modern sustainable food company in a joint direction, executing its ambitious growth strategy with a focus on innovation across categories.

Building on the current strengths of Fazer’s research and development capabilities as well as open innovation in collaboration with universities, research networks, and start-ups, Fazer aims to strengthen its position as a frontrunner in foodtech.

The new xylitol production factory will valorise by-products of Fazer’s milling business and therefore contribute to circular economy goals. The plant will produce the biomass fuel for an associated combined heat and power (CHP) plant to be operated by Lahti Energia that will supply renewable heat and power to Fazer’s site in Lahti, thus reducing the climate footprint of its operations.

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