Swedish vegetable oils and fats producer AAK has strengthened its position in the Russian market by acquiring a 75% stake in NPO Margaron.

based in St Petersburg, Margaron produces margarine and spreads, as well as bakery and confectionery fats.

Neither company has divulged any financial details.

AAK president and CEO Johan Westman said: “Russia and the CIS countries have a population of more than 200 million people and are a highly attractive market for AAK.

“It is also one of the world’s largest chocolate and confectionery markets with strong potential for our special nutrition, bakery and dairy segments as well.

“By strengthening our local footprint, we will have an opportunity to expand our product portfolio and unique customer co-development approach to the Russian market.”

For more than a decade, the Russian firm has been a toll manufacturer for AAK. It registered nearly Skr280m ($29.5m) in revenues last year.

AAK intends to move closer to many of its global strategic accounts, which have established themselves in Russia.

The companies expect to complete the deal in the second quarter of 2020, subject to approval from local authorities.

AAK Europe president Jan Lenferink said: “AAK’s sales team in Russia has together with Margaron delivered strong regional growth over recent years.

“This acquisition will enhance our customer proximity, increase our business opportunities and further grow our market share in the region.”

The company also has the option of acquiring the remaining 25% stake in Margaron, subject to certain long-term targets.

In September, AAK acquired an 80% stake in Soya International (Europe).