Arla to invest €335mn in production facilities

The investment will support Arla's Strategy 2020 by moving more milk from bulk into branded retail sales and foodservice.

Arla Bakery beverage dairy ice cream lactose milk Peder Tuborgh whey protein

Arla investment

In 2017 Arla expects to invest 335 million euro in its production sites around the world to support its Strategy 2020 by moving more milk from bulk into branded retail sales and foodservice. The investment is nearly a 50 percent increase compared to last year’s plan and one of the highest ever single-year supply chain investment forecasts in company history.

With an ambition to expand production of branded high-quality products for Europe and emerging markets, Arla has announced a new investment plan for the coming year. Recently approved by the board of directors, the plan contains investments of up to 335 million euro in 2017 (compared to 227 million euro in 2016).

Most of the investments focus on production upgrades that will increase profitability of products sold on core markets like Germany, UK, Denmark, Sweden, the Netherlands and Finland as well as on production sites that supply high-quality dairy products to Arla’s emerging markets outside the EU.

“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,” says Arla CEO Peder Tuborgh.

Taking mozzarella to new heights
Towards 2020, Arla expects 50 percent of its growth to come from Europe with the other 50percent come from emerging markets outside Europe, where Arla’s strategic focus is especially on the regions Middle East and North Africa, China and Southeast Asia, Sub-Saharan Africa, and the U.S.

An important bet in Arla’s ‘Good Growth 2020’ strategy is to grow foodservice sales significantly by 2020. Consequently, around 18 million euro of this year’s investments will go into expanding and developing Arla’s production for foodservice customers.

One such investment is 13 million euro for Rødkærsbro dairy in Denmark, which is one of the leading mozzarella sites in the world. By investing in new world-class technology, Arla will be able to take the product quality to new heights as well as expand the site’s production of mozzarella for the international pizza industry.

Whey protein and lactose
The site Denmark Protein near Videbæk, Denmark which produces protein, lactose and other highly value-added whey-based ingredients for the global food industry, is the Arla site on the receiving end of the biggest total investment amount in 2017 with approx. 30.6 million euro.

The money will be spent on general upgrade and expansion of production facilities, including improvements of the sites protein and lactose processing.