Aarhus United A/S - Building the Lead in the 1960s

Building the Lead in the 1960s


Aarhus continued developing its specialty fats expertise. In the 1950s, the company's attention turned toward the development of a cocoa butter equivalent (CBE) capable of replacing part or even all of the cocoa butter needed for the preparation of chocolate. Supporting this effort was the construction of a modern production facility in the mid-1950s. By 1960, the company had succeeded in developing its first CBE, called Kawex. The new substance represented not only a significant cost savings to chocolate manufacturers, it also offered a greater flexibility for the production of new types of chocolates than cocoa butter itself.

Aarhus then began working with its customers to refine its CBE technology, and by the end of the 1960s had developed its hugely successful ILLEXAO. The success of its efforts led the company to continue its expansion and modernization of its production facilities, including the construction of a continual fractionation plant by the end of the 1970s.

During this period, also, Aarhus rapidly expanded its product range, adding salad oils, frying oils, baking fat and butter replacements, confectionery fats, and other specialty food oils and fats. The company also recognized an extension of its fats technology into nonfood categories, such as oils, lotions, and creams for the cosmetics industry as well as for the pharmaceutical industry. The company developed a range of technical oils for use in the printing and paper industries, as well as for industrial applications, such as hydraulics systems and lubricants. Aarhus's commitment to technical development helped it gain the global leadership in the specialty fats market by the end of the decade.

That period marked a new era of international activity for Aarhus. For one, the end of the 1970s had seen the beginning of a new level of partnership with Malaysia-based United Plantations Berhad. United had been founded at the beginning of the 20th century by a Danish entrepreneur, and had grown into Malaysia's largest oil palm plantation group. Danes remained in control of United despite Malaysian nationalization programs in the 1970s. In the late 1970s, Borge Bek-Nielsen, then head of United, saw strong potential in forming a partnership with Aarhus. In 1978, United acquired a major stake in Aarhus, which remained at 43 percent through the end of the century.

Cementing their relationship, Aarhus then bought a stake in United's holding vehicle, International Plantations and Finance, in 1981. Aarhus later bought a stake in United itself, acquiring 32 percent in 1991. The company later reduced its position to 23 percent.