Arla Foods will invest DKK2.2bn (US$397m) in ten of its dairy sites this year as it looks to boost production, target emerging markets and become more eco-friendly.
The dairy giant hopes to double exports of European products to growth markets outside the EU by 2017.
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“This year we are increasing our investments to dairy sites that contribute to our export out of Europe. Our sales on the growth markets outside the EU are growing at a fast pace, and we must prepare ourselves to meet the rapidly growing demand in years to come,” said Arla vice-CEO Povl Krogsgaard.
In total, DKK750m will be invested in production for Arla’s “strategic growth markets” outside the EU – Russia, China, the Middle East and Africa. Last year, it spent DKK466m.
The largest investment this year is of around DKK530m for the ongoing construction of a new lactose production site near Nr. Vium in Denmark. The new site will produce value-added lactose ingredients based on whey from Arla’s nearby cheese plants. These ingredients will be used for child nutrition products and other categories and sold to the food industry globally.
Other examples of investments in 2014 include DKK126m at Arla’s Pronsfeld dairy in Germany, which exports products such as UHT milk and milk powder to Asia and Africa. In Germany, Arla is spending DKK95m on a site in Upahl to expand production of quark. In the UK, some DKK81m will be spent on building a cheese packaging facility at its factory in Oswestry.
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By GlobalDataMeanwhile, Arla said over DKK125m will be spent on making its production more environmentally friendly.
“The target set in our climate strategy in Arla is to reduce our overall CO2 emission by 25% Our production plays a key role in the efforts to reach that target, and therefore we are investing in new state-of-the-art heating pumps and water-saving equipment. This will reduce our energy consumption and our emission of CO2,” said Krogsgaard.
