Japanese food and oil firm Fuji Oil Company has formed a joint venture with India’s 3F Industries to set up a production facility to make ingredients for bakery and confectionery customers.

The plant will be situated in the state of Andhra Pradesh, close to the city of Hyderabad where 3F, a manufacturer of bakery fats, margarine and confectionery fats, has its headquarters. It is expected to start production by March 2015.

The initial investment into the project is expected to be around INR1bn (US$16m). Fuji Oil will have the majority share of the new company in a 55:45 split. The company said on its website “expansion within the Asian market” was one of the key focuses for the group’s global management.

Yoshitaka Ebihara, chairman of Fuji Oil Japan, expressed his delight at the new partnership.

“The integration of sales/marketing network of 3F and 3F’s best-in-class customer services together with our quality cream will enable customers in India to expand their confectionery and bread business more. This joint venture is Fuji Oil’s first foothold in India, where high growth of the market is expected. We are confident that the joint venture will grow rapidly and make sustainable growth.”

3F director Sushil Goenka added: “We are very happy to partner with Fuji Oil and explore the rapidly growing market of non-dairy cream and supply world-class products to our customers. This partnership will also allow us to build further scale and competencies in areas of processed vegetable oils and fats and other foods products for the Indian market.”

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The demand for cream in India is estimated to be around 90,000 tons per annum. The market for non-dairy whip cream is expected to expand at 15-20% per annum.