Arla’s €527m investment to support growth plan

Danish dairy cooperative Arla Foods is planning to invest €527m this year in order to improve as well as expand its production capacity to support its 2020 growth ambition.

The decision to significantly increase the investments in the company was taken by the Arla Foods board of directors.

Arla Foods chairman Åke Hantoft said: “Arla has a history of good investments for sustained growth.

“The board of directors has decided to increase our investments with this plan because we have identified new projects and investments with short and long-term potential for significant return.

“The business growth these investments will create for our company will generate growth opportunities for our farmer-owners. We see these investments as essential to the future of our business.”

With its latest investment, the company intends to meet the growing demand for dairy, and producing healthy and natural products that match consumer lifestyles, while maintaining sustainable food production patterns.

Arla intends to direct 50% of the investments into the non-European markets such as Middle East, North Africa, China, Southeast Asia, Sub-Saharan Africa, and the US.

In Europe, Arla will be investing €266m in Denmark, €82m in the UK, €78m in Sweden, €65m in Germany, and €36m for production in other countries.

Arla Foods CEO Peder Tuborgh said: “This investment plan is a growth plan aimed at expanding our positions in key dairy categories and geographic markets where Arla is already a key player.

“Our ambition is to create an even stronger foundation for our farmer-owners and our future business growth.”

The investment will also be used for Arla’s new Lactofree production facility at its Aylesbury site in the UK.

The Lactofree facility will be built with an investment of €56m, which will be engaged in the production of Lactofree products.

In order to address the growing demand for its milk powder and UHT milk products from Southeast Asia and Sub-Saharan African markets, Arla intends to expand its production site in Pronsfeld, Germany, that supplies milk powder and UHT milk.

For increasing whey protein ingredients production, the company is planning to invest more than €100m in its subsidiary Arla Foods Ingredients.

The company will also be investing €15m in 46 projects, which will enable Arla to reduce its carbon emissions.