Fazer Xylitol Factory – the pioneer in sustainable and circular food production

2021 remarks a milestone for Lahti as it was awarded the European Green Capital. The capital of Päijät-Häme region impressed the Awards Jury members with strong environmental blueprints of improving air quality, control waste management as well as boost green growth, eco-innovation, and governance. One of the driving forces that determine Lahti’s commitment to action plans is the immense investment in sustainable production which encourages circular business models in the food and agriculture sector in the community. (European Commission 2021.)

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Image 1. Lahti is surrounded by nature (Bird 2021)

A notable company that continuously innovates healthy solutions for the customers in this field is Fazer. The company has proved its position as the pioneer in sustainable food production. Fazer Mills, as the manufacturer of  high-quality products, invested up to 40 million euros to build up a xylitol factory in Lahti next to its oat mill to produce xylitol from oat hulls. Xylitol, a healthy replacement for refined sugar, is produced from the oat hulls, which is the side stream of the oat milling process that is mainly used for energy production or cattle feed. With the patent technology and circular production, this unique innovation has made the xylitol factory become the world’s first fully backward manufacturing facility to produce xylitol used in food, cosmetics and pharmaceutical market. (Fazer Mills 2021a.)

Image 2. Fazer Xylitol factory’s construction (Fazer Mills 2021a)

Background of the Fazer Xylitol factory

The idea of this venture originated from the bold creativity of Anna Nicol – the director of Fazer’s Xylitol factory project. Initially, as she recognized that oat hull is a potential source of xylose which is the main ingredient of xylitol, Ms Nicol carried out intensive research with internal and external stakeholders in several experts. Her thinking outside of the box and can-do attitude have turned the plain concept into actions with achievable goals and promising results, marking an innovation in the circular economy. (Fazer Mills 2021b.)

Ms Nicol emphasized in her interview (Nicol, 2021) that cooperation and teamwork drove success forward. The project involved an external partnership with a startup company that has competent expertise in sugar processes to implement numerous pilots and testings of oat hulls utilization before finalizing the process. In addition, Fazer Mills is a member of the Grain Cluster – a local network focusing on innovating grain-based products and solutions. The Grain Cluster opens up opportunities for enterprises of all sizes along with various actors in the region such as farmers, breweries, bakeries to discuss innovative ideas and establish potential partnerships.

Altogether, the Fazer Xylitol factory reinforces Fazer’s position as the forerunner in developing circular business models and production processes. Nonetheless, the Grain Cluster facilitates partnerships of innovation and solutions in the circular economy through open discussion and concrete know-how.


Diem Pham is a bachelor student of the International Business program at LAB University of Applied Sciences. The article is based on the initiatives of the country report in Nordbiz Intensive Course 2021 with the theme of circular economy in the food and agriculture industry.

Anna Pajari (MSc., MSc in Bus.adm. & Econ.) works as a senior lecturer at LAB University of Applied Sciences in the department of Business. Her specialization area is Corporate Social Responsibility.


European Commission. 2021. Welcome to Lahti, the European Green Capital of 2021. [Cited 08 June 2021]. Available at: https://ec.europa.eu/environment/europeangreencapital/news/Lahti_European_Green_Capital_2021.html

Fazer Mills. 2021a. Building up the xylitol factory [Cited 08 June 2021]. Available at: https://www.fazermills.com/products/fazer-xylitol/building-Fazer-xylitol-factory/

Fazer Mills. 2021b. Anna Nicol’s idea grew into a xylitol factory. [Cited 08 June 2021]. Available at: https://www.fazermills.com/products/fazer-xylitol/building-Fazer-xylitol-factory/top-team-behind-the-project/Anna-Nicol-idea-grew-into-a-xylitol-factory/

Nicol, A. 2021. Project manager of Fazer’s Xylitol factory project. Fazer oy. Interview 26 February 2021.


Bird, T. 2021. How Lahti earned its place as the Green Capital of Europe. [Cited 08 June 2021]. Available at: https://www.independent.co.uk/climate-change/sustainable-living/lahti-green-capital-europe-finland-b1807297.html

Fazer Mills. 2021a. Building up the xylitol factory [Cited 08 June 2021]. Available at: https://www.fazermills.com/products/fazer-xylitol/building-Fazer-xylitol-factory/

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