Arla Foods has said it aims to double ingredients sales in the next five years as part of a new business strategy designed to increase the dairy co-operative’s presence in emerging markets.
Arla said today (11 January) it wants global sales of its highly-profitable ingredients business to hit DKK5bn by 2017, up from DKK2.5bn (US$444m) currently.
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The Danish dairy co-operative has replaced its current 2015 business strategy with a new plan leading up to 2017. Russia, China, Africa and the Middle East are seen as key to Arla achieving its aims.
The move comes at least partly in response to the planned end of European Union milk quotas in 2015, a development that Arla expects to result in increased milk supplies.
Consequently, the group believes it will need to find new markets for its products.
It also expects to cut costs in Europe, and is seeking DKK2.5bn in efficiency savings by the end of 2015, as part of the 2017 plan. Specific cost savings proposals were not published.
“We have an opportunity to achieve profitable long-term positions in markets outside the EU,” said Arla’s chairman, Åke Hantoft. “Our dairy products need to reach many new consumers as these increased global sales will help to maintain a viable dairy business in northern Europe,” he said.
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By GlobalDataArla’s CEO, Peter Tuborgh, said: ”We are four years into the 2015 strategy period and have achieved many of the strategy’s objectives, and are close to the revenue target of DKK75bn. Our recent growth must deliver an even higher return to our cooperative owners, and releasing Arla’s new potential is a major task.”
