Arla looking to considerably expand business in Africa

Dairy chain wants to quintuple its turnover in the next five years

With Nigeria as a base, the Danish dairy giant Arla is looking to seriously escalate its business in the largest growth markets in Africa.

The company is seeking to quintuple its turnover in Africa over the next five years, according to its head in Africa, Steen Hadsbjerg.

“We have an extremely aggressive strategy for Africa,” Hadsbjerg told Børsen business newspaper. “Africa is the last frontier – the last large undeveloped market.”

“The African countries are not easy or obvious markets, but it’s here the growth will be. Looking around the world, one can see that Russia has become a tough market and China’s growth tempo has slowed down. Not much is happening in Europe, so Africa is the last great undeveloped market.”

Arla is based in Lagos, the largest city in the most populated nation in Africa, but by 2020, the company hopes to have marketed its products in a number of other nations on the continent.

READ MORE: Arla teaming up with Egyptian dairy kings

Loads of potential
But it won’t be easy. According to Hadsbjerg, there are many challenges involved with making strides in Africa, including veterinary standards, infrastructure and cooling supply chains. So Arla is initially looking at getting a foot in the door via powder products.

The current turnover for Arla south of the Sahara is around 612 million kroner a year,  and aside from Nigeria, Hadsbjerg is keeping a close eye on possibilities in Ghana, Senegal and Mauritania as well as challenging markets in Angola, Congo and DR Congo.

In east Africa, Kenya, Tanzania, Zimbabwe, Zambia and Malawi are also on the watch list.

“Despite the political challenges, we believe great growth is possible in most of these nations,” said Hadsbjerg.