Arla Foods plans to set up an "innovation centre" in Denmark in a bid to compete in a "tough" international dairy market.

The Lurpak and Castello brand owner will build the facility in the Danish city of Aarhus, where it already has an R&D site.

Arla said it had "maximised the potential" of its two centres in Denmark and Sweden. It has decided to spend DKK270m on a single location.

"We are launching more new products than ever before, and the ability to generate original ideas and products for the consumers is increasingly crucial for the business. Arla is one of the world’s leading dairy companies, and we must be in a position to drive and lead dairy innovation on a global scale in order to increase the value of our products and create new business for Arla worldwide," Paul Cornilllon, head of strategic innovation at Arla, said.

Construction will start in the spring and is expected to be completed by the third quarter of 2016. It will employ 120 people, including 65 transferred from the existing Aarhus site.

"We want 10% of our annual revenue to come from new product launches. That is an essential part of our growth ambitions and our mission to create the highest possible value for the milk supplied by our co-operative owners," Jais Valeur, head of global categories and operations at Arla, said.

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Arla to invest 270 million DKK in global innovation centre 

A brand new state-of-the-art innovation centre is set to become the epicenter for Arla’s product development for the entire world. Located in Aarhus, Denmark it will employ 120 people as Arla looks to invest over a quarter of a billion DKK in its construction. The aim is for Arla to become one of the leading dairy innovators in the world. 

In recent years, Arla has increased its innovation efforts by redesigning processes and structure. Developing new cheeses, yogurts, infant nutrition powder or butter products that consumers from all over the world will find appealing and relevant has become an increasingly important, and strategic, part ofArla’s business in the face of tough international competition. 

Arla has had a healthy pipeline of new launches in recent years and has now reached a point where it has maximised the potential of its current innovation setup, with the current centres in Denmark and Sweden not having the capacity to deliver Arla’s future growth agenda. Given the strategic importance the company is placing on innovation, Arla’s board of directors has taken the decision to invest 270 million DKK in a new global innovation centre that will gather all of Arla’s innovation resources in a single location. 

“Today we are launching more new products than ever before, and the ability to generate original ideas and products for the consumers is increasingly crucial for the business. Arla is one of the world’s leading dairy companies, and we must be in a position to drive and lead dairy innovation on a global scale in order to increase the value of our products and create new business for Arla worldwide,” says Senior Vice President and head of strategic innovation in Arla, Paul Cornillon. 

Based in Denmark 
The new global innovation centre will be a 10,000 square metre state-of-the-art facility with open space and project rooms for seamless collaborations and will be built in Aarhus, Denmark. It will become part of the Danish Food Cluster, which is an international cluster of excellence for innovation and distribution of knowledge within the agriculture and food sector. 

”Various locations across Europe have been analysed before our ultimate decision to base the centre in Aarhus. The facility will be placed close to the many global functions that are based in Arla Foods headquarters, and we also see many opportunities to enter into partnerships and sharing knowledge with existing and future organisations in the Danish Food Cluster, which will strengthen Arla Foods’ innovation culture, reputation and performance,” says Paul Cornillon. 

The construction of the Arla’s global innovation centre is expected to be completed by the third quarter of 2016 and it will employ 120 people, of which 65 will be transferred from the current centre in Aarhus. The centre will be compliant with 2020 energy standards in Denmark. 

Increasing the value of milk 
The investment of 270 million DKK will have significant strategic importance to Arla Foods. 

”Innovation of the highest international standards plays a key role in Arla’s efforts to reach the targets in our Strategy 2017. We want 10 per cent of our annual revenue to come from new product launches. That is an essential part of our growth ambitions and our mission to create the highest possible value for the milk supplied by our cooperative owners,” says Executive Vice President Jais Valeur, who is head of Global Categories and Operations in ArlaFoods. 

The construction of Arla’s new global innovation centre will begin in the spring of 2014. 

Original source: Arla Foods