Danish dairy giant Arla Foods is to spend GBP25m (US$32.8m) developing a UK site for the manufacture of its lactose-free milk products.

The plant is an existing Arla facility in the North Yorkshire town of Settle in northern England and bringing it into use for the manufacture of its Lactofree milk will mean the cooperative will no longer have to ship the specialist product into the UK from Denmark.

In a booklet sent to residents of the town, Arla said: “It’s been a while since we made a significant investment in Settle, so we’re writing to let you know that we have started some work on site to ensure we can remain part of Settle for years to come”.

Arla went on to say that work will involve getting the site ready to become the new home of Arla’s Lactofree milk products.

It said the products had “gone from strength to strength” pointing to coffee shop chain Costa now serving the milk in store as well as it being sold by all the major retailers. 

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By GlobalData

The Lactofree range also encompasses cheese and yogurt.

Arla said: “Currently, it’s made in Denmark with milk from Arla’s Danish farmer owners, but now, with an investment worth just over GBP25m, Arla has decided to also start producing Arla Lactofree fresh milk in the UK using milk from our Yorkshire and UK farmer owners.”

Arla said it had originally considered a site in Aylesbury in the south of England for Lactofree production but said “making it at Settle not only gives us a chance to upgrade the site, but also secures its future”.

The cooperative said it will be able to process around 120m litres of additional milk and this could mean it can create up to 50 new jobs in the next few years. 

It will be building some new parts to the site and upgrading some of the technology to “make us more energy efficient”.

It said: “The new technology is much more in line with Arla’s focus to be as sustainable as possible as we strive to become a carbon net zero company by 2050. That means we are also getting rid of two diesel oil tanks and removing our bigger outdated backup boiler as our new Lactofree steam boiler will meet our needs.”

Existing silos that store the milk will be re-cladded to improve the external look of the site and additional fridge space will be provided to chill the product and to load it onto lorries. 

Arla aims to start producing Lactofree from the Settle site in 2021.

just-food has asked Arla about the ramifications of this move for the Denmark plant which had previously supplied the UK.