DENMARK: Emerging markets core focus in Arla investment plan
Arla has outlined a $397m investment plan for 2014
Arla Foods has increased the level of investment into its growth markets compared with last year, a move the dairy giant said is essential for it to remain ahead of competition.
Speaking to just-food today (4 February), a spokesperson for the co-op said emerging markets are "without a question" driving global dairy market development.
"There are countries that are themselves experiencing growth which is creating a growing middle class. One thing this growing middle class is looking at is adding more nutritious foods to their lives. Dairy products play a key part in that process. We've seen that in the Middle East, Asia, Russia and Africa. People acquire more money and want to feed themselves and their kids in a more nutritious way and therefore demand for dairy products is growing rapidly."
Arla Foods yesterday announced it would pour DKK2.2bn (US$398.3m) into ten of its dairy sites for this year to boost production, target emerging markets and become more eco-friendly.
The dairy giant hopes to double exports of European products to growth markets outside the EU by 2017.
In total, DKK750m will be invested in production for Arla's "strategic growth markets" outside the EU - Russia, China, the Middle East and Africa. Last year, it spent DKK466m.
Arla's environmental initiatives will see it try to to make production more eco-friendly, slashing CO2 emissions by 25%, for which the firm set aside DKK125m.
"The more eco-friendly you can get, the more expenses you save and the more efficient production becomes as you lower energy and water. So while it's a good investment, it's also a good contribution to nature that we as a dairy company live off," said the spokesperson.
He added Arla's annual investment review allowed it to stay ahead of competition each year.
"Every year we assess the needs for investment and put it into production. Yes, you could say it is in order for us to have the most profitable business we can have, and yes, to do that you have to be ahead of the game and aim to compete."
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