Swedish-Danish company that produces high-value added vegetable oils and fats AarhusKarlshamn (AAK), along with its Israel-based partner Enzymotec, is set to expand the production capacity of InFat at its factory in Karlshamn.

The company said that the new move is the result of surge in demand for InFat formulation, which was primarily driven by China’s infant formula market.

AAK believes that the factory expansion will allow it to raise the production to cater to the estimations for continued strong growth in Advanced Lipids over the next several years.

AarhusKarlshamn vice president Renald Mackintosh said that the surge in demand was being primarily fueled by the Chinese market growing at more than 20%.

"We expect to double output by the start of 2013," Mackintosh added.

AAK opened its current Karlshamn facility for the manufacture of InFat in 2008, and the sales of the product have significantly grown since then.

The product has been introduced to the infant nutrition industry by Advanced Lipids, a joint venture between AAK and Enzymotec.

InFat is produced in an unique enzymatic process in which the triglycerides from a vegetable fat – typically palm-based – are rearranged, and is believed to be an effective addition to infant formulas.

The company claims that this unique fat allows easy digestion and optimized uptake of calcium, fat recovery and energy.

Last year, the company established a sales company in China with an aim to be a global business partner with a strong local presence in order to serve its global and local customers.

AAK reported an increase in 2011 net sales to SEK16.7bn ($2.47bn), up 13%, when compared to SEK14.8bn ($2.19bn) last year.

The company’s operating profit for the period was SEK914m ($135.6m), an increase from SEK882m ($130.9m) in the previous year.