Danish dairy giant Arla Foods expects turnover in the Middle East to be back to 50% of its average annual turnover of DKK3bn (US$511m) by the end of the year.

The company has been hard hit in the region as part of a reaction to controversial cartoons of the prophet Mohammed published by Danish daily Jyllands-Posten in 2005 and reprinted elsewhere.

Division director Finn S. Hansen was cited in Danish media as saying that exports to the Middle East would remain impacted by the consumer boycott that followed the cartoons' publication for the next two to three years.

The company hopes to limit losses to DKK400m in 2006 as the effect of the boycott recedes. Sales in the region are currently running at about 35% of normal business.