FDBusiness.com

Arla Foods Stays Focused in an Unpredictable Market

 Breaking News
  • Discovery, Plant-Based and Alternatives Lead the Top Ten Trends For 2019 Targeting increasingly adventurous consumers, set on new discoveries and experiences, will be key to developments in the food and beverage industry in 2019. The connected world has led consumers of all ages to become more knowledgeable of other cultures, contributing to 35 percent growth of “discovery” claims, when comparing 2017 and 2016 new product launch [...]...
  • Pearse Lyons Brewery to Open New Facility at Historic Irish Site Alltech Beverage Division Ireland (ABDI) has made an announcement about the planned opening of a new brewery at the historic site of the old MacArdle Moore Brewery in Dundalk. The new Pearse Lyons Brewery will incorporate the relocation of the Station Works Brewery in Newry, which was acquired by the late Dr. Pearse Lyons in [...]...
  • WRAP Comes Up With Winning Formula to Tackle Milk Waste A new report from the UK’s leading sustainability experts WRAP shows for the first time the scale of milk wastes across the food chain, from processing to our homes, and highlights ways we can significantly reduce the 330,000 tonnes of total milk lost each year, worth more than £150 million. Milk waste in the home is [...]...
  • Samworth Brothers Launches New Fitness-focused Ready Meal Range With Innovative Identity by Brandon Leading British food manufacturer Samworth Brothers is launching a ground-breaking range of ready meals to appeal to everyday athletes, with brand identity and packaging by design consultancy Brandon. Responding to an increasing consumer demand for healthier convenience options, the meals, which come in three variants – Cajun Chicken, Turmeric Chicken and Pad Thai Chicken – are [...]...
  • Premier Foods Shows Resilience Premier Foods has reported a 1.3% increase in group revenue to £358.0 million and a 6.2% rise in trading profit to £51.0 million for the 26 weeks ended 29 September 2018. The group’s largest brand, Mr Kipling, was key to this growth following an excellent consumer response to its relaunch in the UK with revenues [...]...

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

  • November 21, 2018expoSE European Asparagus and Strawberry Fair
  • November 27, 2018Health Ingredients Europe
  • November 28, 2018FOOD & LIFE
  • December 3, 2018P&P 2018
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements