Arla to invest €335m in production facilities

Multinational dairy company Arla Foods is planning to invest €335m in its production facilities worldwide to support its Strategy 2020 by moving more milk from bulk into branded retail sales and foodservice.

The new investment is reported to be 50% higher in comparison to last year’s plan, and one of the highest ever single-year supply chain investment forecasts in the company’s history.

The company intends to invest majorly in facilities located in Germany, UK, Denmark, Sweden, the Netherlands and Finland, which manufacture products with high returns, as well as on production sites that supply high-quality dairy products to Arla’s emerging markets outside the EU.

Arla CEO Peder Tuborgh said: “With these investments, we continue our relentless pursuit of the goals in our Strategy 2020 to move more milk from bulk into brands and improve the profitability for our farmer-owners.

“You will see Arla take an even stronger position in the market as the innovative farmer-owned dairy company, providing great-tasting, natural dairy products that help people make good food choices. That is the main focus of these investments.”

The company plans to invest €13m in the Rødkærsbro dairy in Denmark, which produces mozzarella, and it would further enhance quality and the site’s production capacity for the international pizza industry.

This year, the company also intends to invest approximately €30.6m in Denmark Protein site in Videbæk, Denmark, which produces protein, lactose and whey-based ingredients.

The investment will be used towards the upgrade and expansion of production facilities.

Arla’s supply chain vice-CEO and executive vice-president Povl Krogsgaard said: “One of the ambitions in our Strategy 2020 is to be a global leader in natural whey ingredients for food producers in a range of categories, from bakery, beverages, dairy and ice cream to medical, infant and sports nutrition.

“The investment in our Denmark Protein site is key to meeting that ambition and it will help us build on an already strong and profitable part of Arla’s business.”

The dairy company will also be investing €12m in new packaging designs for its spreadable cheese products and €22mto improve energy efficiency across all sites.

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Image: Arla plans for a major investment across all its facilities. Photo: courtesy of Arla Foods.