Arla stepping up investments

The dairy giant is increasing sales in emerging markets outside the EU

Feb 4, 2014

In a bid to double its export of dairy products to growing markets outside the EU by 2017, dairy giant Arla announced that it will invest 2.2 billion kroner in a more environmentally-friendly production in ten countries.

One billion kroner of the total investment will go toward production plants in Denmark, Arla stated in a press release.

“This year we are dramatically increasing our investment in the dairies that produce for export,” Povl Krogsgaard, the deputy head of Arla, said. “Our sales in emerging markets outside of the EU are increasing quickly and we must ensure that we can keep up with that growth in the coming years.”

Taking the sustainable route
Some 750 million kroner are earmarked for production of goods for Arla’s strategic markets outside of the EU – Russia, China, the Middle East and Africa – but Krogsgaard underlined that Arla’s ambitions go hand in hand with sustainable solutions.

“Arla wants to grow in the good way so we will also invest 125 million kroner into actions that will make our production even more sustainable and environmentally-friendly,” Krogsgaard said.

Last year, Arla invested 466 million kroner into production in emerging markets.

New lactose plant
Arla’s investment into production in 2014 equals less than three percent of its expected turnover of about 79 billion kroner, which is also Arla’s business strategy for 2017.

The goal is to increase profitability in the company and create better long-term income opportunities for its shareholders.

The largest single investment this year will be a 530 million kroner investment into the construction of a new lactose plant in Nørre Vium in western Jutland.

The plant will produce highly-processed lactose products that will be sold globally by Arla’s subsidiary, Arla Foods Ingredients.

“It is a very important investment. One of our most profitable business areas is whey-based ingredients for the food industry and that business must be doubled by 2017,” Krogsgaard said.