Danish-Swedish coop Arla Foods has stressed that despite Wednesday’s announcement revealing the closure of 17 production plants and the loss of over 1,000 jobs, the restructure will make it one of Europe’s strongest dairy groups.
“This is the largest restructuring and investment programme ever launched in the Nordic dairy industry,” Arla said in a statement.
Over the next five years, an extra SKr2.3m will be invested in establishing new plants and enhancing production at its 40 remaining units. The financing of the restructuring programme is not yet clear, but unconfirmed reports said milk producers would take a SKr0.05 per litre cut in their milk price during the period. Also, Arla has issued a SKr2.5bn commercial paper for unspecified purposes.
Arla Foods also revealed an ambitious target of 10% annual growth, to be met through a 5% increase in existing businesses and mergers and acquisitions.
“Primarily, we will grow in Great Britain, and secondly in Germany,” deputy MD Åke Modig told Swedish newspaper ATL. Germany will remain the most important export market, but added emphasis will be put on Spain, the Netherlands, Greece, Finland, and outside Europe, Argentina.
The company will also target new consumer groups and plans to develop new products for restaurants, petrol stations and foodservice shops. It will focus on the European cheese market by developing the Arla brand and milk powder production will be a cornerstone of the new strategy.
“Arla Foods shall be one of the world’s leading producers of milk-based ingredients to the international food industry,” the statement continued.
According to the company “mission,” Arla Foods will offer modern consumers milk-based food that inspire and create safety and well-being.
By Jerry Simonsson, just-food.com correspondent