Arla Foods forms joint venture with Egypt’s Juhayna

Denmark-based food company Arla Foods has signed a joint venture with Egypt’s dairy company Juhayna, through which Arla will sell its products across Egypt.

Although Juhayna owns 51% of the new entity formed from the joint venture, Arla will be responsible for its daily management.

The new company will be named ArJu Food Industries, and will aim at starting sales operations in October.

With the new joint venture company, Arla expects its Egypt revenue to reach more than €90m in 2020.

Juhayna specialises in producing UHT-milk, yoghurt and juice. However, its production of butter, cheese and cream is low.

Arla senior vice-president of the Middle East and Africa, Rasmus Malmbak Kjeldsen said: "It is a very good match for both parties. Juhayna has a nationwide distribution network, and we are not competing within the same product categories.

Together we now get a broader product portfolio, which strengthens the business of both parties.

"We have built our entire business in the Middle East through cooperation with local partners. In Arla we excel at making joint ventures succeed, and that is a business model we will use to establish ourselves in other African markets as well."

The joint venture, which also aims at starting local production in Egypt, will employ 40-50 people initially, that will be increased to 100 in the next few years.

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Image: Juhayna specialises in producing UHT-milk, yoghurt and juice. Photo: courtesy of Naypong.