Arla Foods is investing Skr70m ($7.4m) in a dairy plant in Sweden as the cooperative seeks to increase production of cottage cheese.
Denmark-headquartered Arla said the investment in its west coast Falkenberg site aims to boost annual output of Keso branded cottage cheese by 1,500 tonnes. The target for this year is 27,000 tonnes, which if realised would represent around a 17% rise over 2024, according to a statement.
Arla clarified that the project will focus on upgrading existing equipment, including filtration and cooling, alongside improving capacity and efficiency. The Falkenberg dairy, which mainly supplies the Swedish market but also exports to Finland, Denmark and Spain, currently has six packaging lines, the co-op confirmed.
No additional jobs will be created at the site, with the workforce remaining at around 130 people. However, Arla said staff numbers at Falkenberg have grown by around 20% in the past two years as cottage cheese demand increased.
Arla claims Falkenberg is the largest cottage-cheese manufacturing plant in Europe that also produces the Cheasy brand. The factory processes around 130 million kilograms of milk a year from its farmer suppliers.
The investment will be put to work early in the new year with the additional capacity expected to come on stream in the final quarter.
Sweden generated €1.59bn ($1.85bn) in revenue for Arla last year, an increase of 3.6%. Total group revenue climbed 0.7% to €13.77bn.
The country was also earmarked for investment earlier this year, with €34.5m due to be ploughed into Arla’s facility in Jönköping to kick start production of skyr.
Cream cheese was the target for another project in Denmark as the co-op set out plans to invest €59.4m in its Holstebro Dairy.
April marked a key development as Arla announced a plan to merge with German dairy peer DMK Group, subject to regulatory approval.
Asked for an update by Just Food today (2 December), an Arla spokesperson said it expects to receive the competition body's decision in the first half of the new year.
Meanwhile, Arla issued first-half results in August. Revenue was up 12.7% at €7.45bn while EBITDA registered a 5.5% increase to €540m.
EBIT rose 6% to €282m but net profit slipped 3.5% to €167m.
