Danish dairy conglomerate Arla Foods, maker of Lurpak butter, has announced plans to move a production plant to Saudi Arabia, according to the Arab News newspaper.

The move is part of Arla Foods' business policy to expand and maintain its position as market leader in Saudi Arabia and other Middle East countries especially in terms of sales and production of fresh cheese, butter and cream.

"This relocation project is in planning phase and we are awaiting approval from the Saudi regulatory agencies," said Max Sorensen, general manager of Danya Foods, the local partner of Arla. This new plant, once completed, will help to increase sales of Arla's products from the current 60,000 tonnes per year to 120,000 tonnes by 2010. Arla's Lurpak is the Middle East's leading butter brand, also accounting for a major market share in Saudi Arabia.

Sorensen said that he was hopeful of major progress in terms of the relation of the plant within next six months. He said: "Within the next six months, the company will be able to spell out the business plans in detail besides the company's plans to train local manpower."