Arla Foods to invest DKK2.2bn to boost production capabilities

Arla Foods, a Swedish-Danish dairy co-operative, has outlined plans to invest DKK2.2bn in ten of its dairy sites across the world this year to boost its production capabilities.

The investment is in line with the company’s efforts to double its exports of European dairy products to growth markets outside the EU by 2017.

It will be used for new and ongoing dairy expansions and projects that will help make Arla’s production even more climate-friendly.

The company’s board of directors has recently approved the investment plan.

Arla Foods vice-CEO Povl Krogsgaard said, "This year we are increasing our investments to dairy sites that contribute to our export out of Europe.

"Our sales on the growth markets outside the EU are growing at a fast pace, and we must prepare ourselves to meet the rapidly growing demand in years to come."

The co-operative plans a total investment of DKK750m in production to cater to markets outside the EU, including Russia, China and the Middle East and Africa.

The production investments this year represent about 3% of its DKK79bn expected turnover, which is one of the goals in Arla’s Strategy 2017.

The aim is to increase profitability in Arla’s business and create higher earnings for its cooperative members in the long-term.

As per the plan, Arla is investing DKK530m for a new lactose production site near Nr. Vium in Denmark.

Krogsgaard said, "The new lactose site is a very important investment for us. One of our most profitable business areas is whey-based ingredients for the global food industry, and that business must be doubled by 2017."

Around DKK125m will be spent on making production more environmentally friendly with a target to reduce Arla’s overall CO2 emission by 25% by 2020.

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Image: The investment will be used for new and ongoing dairy expansions and projects that will help make Arla’s production even more climate-friendly. Photo courtesy of Arla Foods.