FDBusiness.com

Arla Foods Stays Focused in an Unpredictable Market

 Breaking News
  • UK Supermarkets Sweep Up 17 Months of Growth UK supermarket sales have increased in value by 3.1% compared with last year according to the latest grocery market share figures from Kantar Worldpanel, for the 12 weeks to 8 October 2017. This marks the 17th period of growth in a row for Britain’s grocers. Like-for-like grocery inflation remains at 3.2% but consumers could be [...]...
  • Hilton Food Group to Expand to New Zealand Hilton Food Group, the UK-based specialist international meat packing business, is to proceed with plans to expand its packing capability to New Zealand. Hilton will construct a new meat processing facility in Auckland and supply Progressive Enterprises, New Zealand’s leading retailer, trading as Countdown Supermarkets. As Progressive Enterprises is also part of the Woolworths business, [...]...
  • From Measurement Data to Smart Actions Energy and process industry monitoring and control systems contain a lot of data, which is not always fully utilised. Data is also collected in different systems, which further hampers comprehensive overall management. The efficient use of measurement data is increasingly becoming a crucial factor in gaining a competitive advantage. Elomatic’s FORMIOT data analysis service offers support [...]...
  • Rocla’s Automation Solution Maximizes Storage Capacity and Saves Money Operations at Valio’s new whey powder factory started gradually in Autumn 2014. The main goal was to build a fully automated warehouse. Valio also needed to maximize the storage capacity in this space, and to be able to adjust the temperature and air humidity. At the warehouse there are 3 Rocla’s automated guided vehicles (AGVs) [...]...
  • Packaging Automation Helps Chicory Crops to Grow As a growing business Packaging Automation know how important it is to keep cash within the business and how hard it is to acquire the machines and equipment you need to grow. Packaging Automation want to help businesses to grow, adapt and keep up with what can be frighteningly fast paced growth without tying up [...]...

Arla Foods Stays Focused in an Unpredictable Market

Arla Foods Stays Focused in an Unpredictable Market
September 01
10:46 2015

Globally declining milk prices have impacted Arla Foods’ performance in the first half of 2015. The international dairy co-operative has reported a 3.8% fall in revenue to Eur5.13 billion and a drop in the financial returns paid to its members. Arla Foods expects to process an additional 3-4% of raw milk every year following the abolition of EU milk quotas. However, the depressed global dairy market has impaired Arla Foods’ ability to safeguard the milk price and deliver value to its owners. The performance price for the first half of the year at EUR-cent 33.8 is significantly below 2014. The performance price indicates the value Arla Foods has generated from each kilo of milk supplied by its owners.

Arla Foods is adapting to the depressed global dairy market by directing its increasing milk volumes into retail and branded products, to limit the amount going into less profitable commodity products; focusing on active cost management across its operations; and concentrating on investments that support expansion in the international dairy group’s strategic growth markets outside the EU.

Peder Tuborgh, chief executive of Arla Foods.

Peder Tuborgh, chief executive of Arla Foods.

“Our revenue is in line with expectations for the first half of 2015,” says Peder Tuborgh, CEO of Arla Foods. “We are doing everything we can to minimize the effects of the general global market situation, however it cannot change the fact that our farmer owners are in a tough situation right now.”

Arla Foods has reduced capital expenditure for 2015 and has postponed a number of projects until the dairy market improves. The dairy group is focusing on investments that support the development of its strategic growth markets outside the EU which enables it to channel additional owner milk into branded products.

“When times are challenging for our owners, it is essential that we keep a firm grip on our costs. For this reason we have reduced investments by 30 per cent and are continuing to streamline the organization vigorously and control costs. Our ambition is to achieve total savings from cost programmes of 330 million euro before the end of 2015 compared to 2012 – and we are on track to do so,” says Peder Tuborgh.

ArlaLogoPictureIn line with its strategy of accelerating growth outside its European core markets, Arla Foods has established a new subsidiary in Australia in co-operation with Australia’s largest cheese importer, F Mayer Imports with the ambition to multiply its revenue in Australia fivefold. In Egypt, Arla Foods has formed a similar alliance with local dairy company Juhayna.

Arla’s profit in the first half year accounts for 2.3% of the company’s revenue, but for the full year profits are expected within the 2.7–3.0% range. Revenue for the full year is expected to reach Eur10.2–10.3 billion.

“The global dairy market has rarely been as unpredictable as now, and unfortunately 2015 is proving to be as challenging as we anticipated. Our long-term view is that the market will turn again in the first half of next year, which is why we will stay focused on our strategic agenda,” says Peder Tuborgh.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • October 19, 2017PMA Fresh Summit 2017
  • October 21, 2017Food & Nutrition Conference & Expo 2017
  • October 22, 2017Serbotel
  • October 22, 2017Natexpo
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements