Arla Foods unveils internal transformation programme

European dairy cooperative Arla Foods has launched a three-year internal transformation programme called ‘Calcium’.

Through the new programme, the dairy cooperative intends to improve the company’s overall efficiency levels to save more than €400m by the end of 2020.

Arla CEO Peder Tuborgh said: “At Arla we have always had a culture and strong track record of creating efficiencies and removing costs for the benefit of our farmer-owners, customers and consumers, so in that sense nothing is new.

“What is new, however, are two unexpected developments that have hit us, both of which are outside of our control. These are the currency impact of Brexit on our actual performance and the impact of the reversal in commodity prices on fat and protein on our relative performance against our international peers.

“These developments have negatively impacted our profitability, and as a responsible business we have to act to remove the impact of these new developments, and the action we are taking is a three-year transformation programme which cuts across our whole business and sets out to restore our profitability.”

The programme aims to unleash the full potential of the company by improving its investment capability and its performance in order to benefit its farmer-owners.

Arla noted that Calcium will cover all the activities in the company, including production, products, procurement, promotional marketing and people.

Of the €400m investment, the company intends to return €300m to the farmers through the farmgate milk price, and also reinvest in the company’s Good Growth 2020 strategy to fuel further growth and improve profitability.

Tuborgh added: “Calcium has a high level of involvement amongst our employees and is galvanising and energising our people to deliver better returns for our farmers, and I am incredible proud of them.”